When it comes time to sell your house, you’ll obviously want to squeeze as much money as you can out of it. You made a huge investment and want it to pay off, especially if you plan on buying a larger house. You might be tempted to price it higher than what it’s estimated at, because someone might be more than willing to pay more if your house is perfect for them.
After all, you can always bring the price down to normal if it’s not selling, right?
In the real estate business, that’s not always the best move.
Here’s an example. Your house is estimated to be worth $300,000. You decide to price it a notch higher at $320,000, just in case someone wants to pay that much. It gets looked at by a few buyers but is ultimately deemed too expensive and goes a few weeks with no offers. You decide to throw in the towel and price it down to its normal value at $300,000. Now, you might think that buyers would be ready to swoop up a reasonably priced home, but there’s a good chance that might not happen, for two reasons.
First of all, frugal buyers who would have bought the house at $300,000 but saw it priced at $320,000 might have already moved on. Maybe they bought a different house or decided to put off homebuying for now.
Secondly, buyers will notice that the house has been on the market for quite a while now, and might be suspicious that there could be something wrong with it. They might wonder that prospective buyers were turned away by something they found out during the tour, or that the seller is trying to get the home off their hands quickly.
Now potential homebuyers aren’t even buying it at $300,000, even though it’s priced reasonably, and they would have bought it if it was listed at that price in the first place. You lower the price even below that number to $280,000 and the deal eventually gets accepted. You lost $20,000 dollars on the sale because you were too bold with your original asking price.
The sale still happened, but it would have been better to resist the temptation to price it high and stick with a modest price right off the bat. If you’re selling, it’s best to refer to the advice of a real estate professional who will price it just right so you get the most money possible. If you have to sell by yourself, do your research on home pricing and compare yours to other similar homes for sale within your area. An overpriced home might have the chance of getting sold, but will more than likely force you to drop the price tag.