“Since We’re Not in a Hurry
to Sell, Let’s Price
Our Home Higher than Market Value
and See What Happens”
Makes sense, doesn’t it?
Well, unfortunately it’s not quite as simple as that. Overpriced
listings create some potential problems all their own.
First of all, today’s
buyers are very sophisticated. The exam the available houses on the
market very thoroughly before buying. If the list price of your house
is too high, buyers will use your house to justify the purchase of a home
that is more competitively priced.
In addition, buyers are
generally looking for houses at the top of their price range. If your
house is priced higher than its likely resale value, the buyers who would be
in the market for your house might not even see it. In turn, those
buyers who can afford a higher price will be expecting more house for the
money. By overpricing your house, you will effectively be keeping it
away from the market that really needs to see it.
But suppose you do find
a buyer at a higher price… their lender will still have the home appraised
before approving the buyer’s loan. If the appraisal doesn’t support
the selling price, the buyer may not be able or willing to finance the
purchase.
One final problem with
stretching the asking price is that these houses often stay on the market
for too long, and therefore are perceived as being problem properties.
Market weary properties can result in a series of low-ball offers.
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