It may seem counterintuitive; after all, more space should translate to being more attractive when it comes to selling your house, right? That’s not necessarily the case. With the average American household size standing at just 2.5 people, fewer families than ever are in the market for more space than they have time or money to take care of. If your house is one of the bigger homes for sale in your area, you may experience a tougher time selling it than you anticipated. Why is this?
Condition – if your large house is rundown, and in need of repairs and updates, this can make it more unattractive to buyers than other listings in the area. More square footage equals more money when remodeling. People will naturally be drawn to smaller homes that need less work and upkeep.
Price – larger houses tend to be luxury homes, and luxury homes spend more time on the market than standard properties. This is because there is a smaller buyer pool that can afford this type of home, and they tend to be much pickier than the average buyer.
Surrounding houses – if your house is larger than most in the area, it will be difficult for an appraiser to "comp" (compare to others in the area). If it appraises lower than the contract price, the buyer will have the opportunity to renegotiate or be forced to come up with the difference in cash. Most buyers are already putting everything they have towards the down payment and don't have extra funds to cover the difference. Falling out of escrow is just more time added to the selling process.
Large houses for sale can pose a problem in an unpredictable market, so it’s important to keep these things in mind before listing it.