- You Are Priced Higher Than Your Neighbors – when you interview agents, they should provide you with a market analysis (CMA) using data for homes sold in the previous 6 months that are similar in size and style and are within a 1 mile radius. Very often sellers want to list at a price that is higher than the market data suggests and or they select the agent that presents them with the higher listing price.
- Few or No Showings – buyers are reluctant to view homes that are priced too high, thinking it will be difficult to negotiate the price into a more reasonable range.
- No Offers or Only Low-Ball Offers – in most markets sellers can expect to get an offer within the first 3 or 4 weeks on the market. Low ball offers or no offers at all are a sign that you need to reassess your price.
- Low Internet Traffic – buyers search for homes online. All IDX search engines ask the user to input a price range. If your home is overpriced it will appear with other homes that are larger and/or more updated. Buyers also want to look at photos. If your agent did not have professional photography done on your home, you are at a disadvantage compared to the many homes that draw buyers because of great photographs.
- Other Homes Like Yours Have Sold – if homes nearby have sold and yours has not, the first question to ask is what price they sold for – your agent should be keeping you updated with these stats. Are these homes true comparables? They may be larger, have a finished basement, have high-end upgrades (granite counters, hardwood floors, new appliances, etc.), have expensive updates (a new roof, windows, furnace, etc.), or they have a better location (back to woods, non-flag lot, etc.).
Perhaps the worst thing a seller can do is to list their home at a price higher than their agent recommends to “see what happens,” or to “test the waters.” Even if a rare buyer comes along who wants to pay more than market value, there may be an issue when it comes to the appraised value of the home and you could lose the sale.
Statistics show that overpriced homes sell for less than homes which are priced correctly from day one. Overpriced homes also take much longer to sell. Savvy agents who see that a home has been on the market a long time, with one or more price reductions, may sense a desperate seller and hope to negotiate an even lower price for their buyer.