The 8 Dangers of Overpricing Your Home

An asking price that is beyond market range can adversely affect the marketing of a property. Here are the 8 dangers of overpricing your home.

Missed showings:

Buyers and REALTORS® search within a price range when looking for a home using the Multiple Listing Service (MLS). If your price is above market value, your home will not come up in their search and you lose showings from buyers who can afford your home.

Helping to sell the competition:

Buyers comparison shop when considering a home purchase. When a buyer compares
an overpriced home versus one that is priced at market value it will likely convince them to place an offer on the well priced property instead of yours; you’re helping the competition get sold.

Missing out:

The perfect home for you to purchase may present itself while your home is listed. If you are overpriced, you will have very little chance of selling and therefore you won’t be in a position to buy your desired home. Watching another buyer purchase your dream home is not a fun position to be in, and it can be avoided with a well priced listing.

Low Ball offers:

If you receive an offer it is much more likely to be a ‘low ball’ offer, which results in a frustrated contract and a very low chance of getting an accepted offer. Today's buyers are quite saavy and overpriced listings don't survive their analysis.

Tough to Close:

It’s tough to close an accepted offer on an over-priced listing. This is due to the fact that buyers continue to look at the competition and they quickly realize they have overpaid, which results in buyer’s remorse and a collapsed sale prior to subject removal.

No Chance of Competition:

An overpriced listing will not result in competitive offers, whereby a well priced listing will have a greater chance of receiving offers from more than one buyer, and possibly getting an offer over asking. Real estate agents may forego showing an overpriced listing, as the price shows little motivation by the seller. Buyer’s agents are always keen on getting their clients through the doors of a well priced home first, in order to give their clients first crack at getting the home of their dreams. The best homes sell first.

Risk of falling market:

The longer a listing stagnates on the market the more likely it will sell for less than it would have had it been priced right in the first place. This used to be a coined term by Real Estate professionals, but now it is contained in a study by Ken Johnson of Florida State University.

Bank appraisals:

 Appraisals are required on all new loans. The appraised value is based on the recent sales prices of similar properties. If your home is overpriced, the appraisal may fall short of the offer, and the buyer, not willing to pay more than the appraisal price, will cancel the offer. The bank also will not lend money on an overpriced property to a Buyer looking for a high ratio mortgage, or 20% or less downpayment. A large portion of buyers are high ratio mortgage seekers.

These are just some, and by no means all the reasons why you should consider what the market is doing when it comes to pricing your home. By over pricing a home, you are esentially hoping to win 'the home seller's lottery,' meaning you are hoping that someone will come along and pay an unreasonable amount of money for your home, despite all the facts and comparative information available. In the long term, over pricing your home hurts the overall value of your home, while also sacrificing your time as you wait and learn that overpricing was a mistake.

For help pricing your home competitively while maximizing your return, Call me! I am happy to give you an honest opinion on what to expect.

All the best until next time,

Darin

0. Magnificent Makeovers on a Budget

    

   Have you ever watched those TV shows where some lucky homeowner gets a room redecorated by a professional? To have something similar done in your own home you would have to make a serious investment, or become a TV show guest!

   
   

   However, there are ways to re-decorate a room and make it look great – even spectacular – on a budget.

   Say, for example, you want a living room makeover. If your sofa is worn you can buy a fitted sofa cover that will make it look almost new. Table cloths on worn end-tables and other surfaces can have a similar affect.

   Don't forget the most economical redecorating trick of them all: Paint! A fresh coat of paint can bring a room to life!

   
   

   Hanging a few new pictures can also have a dramatic impact on the look of a room. You don't have to buy a Rembrandt. Attractive, simply framed pictures will also add interest and colour.

   
   

   With a little imagination, it's amazing how much you can improve a room on a little or even no budget. 

How to Be a Savvy Home Viewer

If you're planning on finding your next dream home, then you're probably going to view several homes on the market that meet your criteria.

You will want to make the right purchasing decision for you and your family. So, it's wise to be savvy when viewing properties for sale. Here are some ideas on how to do that.

• Bring a notepad. Take notes, not only of the home's characteristics, but also of how you feel. For example, can you imagine yourself happily cooking up a storm in the kitchen? Do you see yourself entertaining family on the back deck?

• Bring a measuring tape. Will the furniture you plan to bring fit? Your dining room suite? Your home fitness equipment?

• Ask about maintenance. Is the property in a good state of repair? Will anything need to be replaced soon, such as the windows?

• Bring a camera. Take lots of pictures of the home's exterior features. Don't make the mistake of thinking you'll remember how everything looked.

• Check out the area. Do other homeowners take good care of their properties? This shows pride of ownership. How is the noise level? Is there a playground, or another area feature nearby?

• Make a list of compromises. For example, are there only two bathrooms instead of three and, if so, can you live with that?

• Make a list of bonuses. What features does the home have that, are not a necessity, but would be nice to have? For example, an entertainment bar in the basement recreation room.

• Remember your budget. Is the price within your range? Can you afford to buy this home?

  
  

  The savvier you are when viewing properties on the market, the more likely you will be to find your next dream home.