When you’re getting ready to sell your home, one of the first questions that will pop into your head will likely be: What is my home’s value? (Hang tight! We’ve got a cool way for you to calculate that below.) Shortly after that thought crosses your mind, you’ll probably conduct some nifty google searches, being the savvy researcher you are, and then decide it may be worth reaching out to a real estate agent to gather some additional input.
While pricing strategies vary agent to agent, we believe that one of the keys to selling your home in under 7 days––which we do by the way (shameless plug!), is placing it on the market priced right from day one!
During the first two weeks on the market, new properties elicit a certain level of excitement for buyers. When a house is overpriced, the market will respond with a lack of interest, fewer showings and the “excitement” window of opportunity will be missed! 🙂
Here’s another hard truth, when buyers tour a home for sale, it’s usually not the first home they’ve toured, and it’s definitely not the first one they’ve viewed online. Often, they’ve already seen several similar homes and will immediately notice if yours seems overpriced compared to the other homes they’ve seen.
Now I know what you’re thinking, “what happens if I accidently underprice the house? I don’t want to sell it for less than it’s worth.” Well here’s the thing, in a sellers’ market there is really no risk in underpricing a home, since there are plenty of buyers to ultimately bid the price up.
Consider this, if a home is valued by an appraiser at $525,000, but the homeowners believe they can secure at least $560,000, a good point to remember is that the market will ultimately dictate the price. Basically that means, if the home is indeed worth $560,000, then multiple buyers will write offers and the price will be bid up to that value. However, if the home is not worth $560,000, and the homeowners decide to list it at this price anyway, they have now missed out on their home being advertised to the right group of buyers–– the ones looking for homes that cost between $500,000-$550,000, because $560,000 falls outside of this price bracket.
Overpriced homes in DC sat on the market for an average of 58 days and sold for an average of 6% less than asking – with some losing as much as 15% of their asking price and sitting for more than 400 days. Overpricing a home before the November/December holiday season is also a terrible idea and could potentially result in the home not being sold until the following year.
Why does this happen? Even if a buyer like a home and wants to make an offer, most are too timid to negotiate on an overpriced home. Instead, buyers will either forego the home or wait until it’s been sitting unsold for a while, in hopes this will provide necessary leverage to lower the price. That being said, now that the seller has lowered the price, it can create skepticism in the buyers’ mind, as they wonder why no one has purchased the home yet and whether something could be wrong.
Ultimately an overpriced home costs you time and money!
Curious about how much your home’s value is? Check out http://dcre.smarthomeprice.com to receive your home price, recently sold homes nearby, and local market trends!
Bonus Tip: Your home should look it’s very best when buyers tour it for the first time. If buyers don’t like what they see, they won’t be back for a second look. When a property shows well from the start, it creates a momentum and sense of urgency among buyers, giving the seller a marketable advantage over the competition. Before showing your home to anyone make sure it’s sparkling clean and every repair is complete.
