The Risks of Overpricing

(November 14, 2016)

When you put your home up for sale, deciding on a price can be the trickiest part of the equation. One of the first questions in your mind will be “Who will buy my house?” If you set the price too high, the comps.jpganswer is – no one. It’s one of the most deleterious mistakes you can make when selling your home. You may think to yourself, what’s the problem? I’ll just lower the price if it doesn’t sell fast enough. Consider these reasons not to overprice your home.

Discourages showings – many people will pass your home over completely rather than risk going through the trouble of making an offer that they think will be way lower than you’ll accept.

Appraisal will be off – even if you do get an interested buyer, the problem is that the lender requires appraisal, so if your property is priced too high they may penalize the buyer by charging them a higher interest rate, increasing the down payment, or denying the mortgage.

Encourages neighboring home sales – you are competing with your neighbors for buyers. Overpricing your home means those houses look like an even better deal.

Results in lower selling price – sellers who set the asking price too high typically end up taking much less for their home than those who start at a lower price point.

Asking yourself “Who is going to buy my house?” is a wise thing to consider way before ever putting your home up for sale. 

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Jennifer Shenbaum

Written by Jennifer Shenbaum

Jennifer Shenbaum is a real estate investor based in Southern California. She is a veteran of the housing market crash of 2007. Best of all, she offers free remodeling ideas to all who ask.

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