Overpricing a Home: Dangers Clients Don’t Know

No home selling process is going to run its course unscathed. As an agent you have undoubtedly encountered many obstacles that could hinder progress, or unfortunately, soured the relationship with a client. Learning how to handle these situations with poise and dexterity will allow the ship to remain on course.

One of the most common issues an agent will face when dealing with a seller is the actual pricing of the home. It is easy to understand they would like to gain the max amount possible, they usually have a skewed perspective on the market their home is participating. Changing their mindset can sometimes be rather challenging. But, with effective communication you can get the entire team on track to achieving the desired goal.

The dangers of overpricing a home cannot be overlooked, but most clients are unaware of the following ramifications:

Your Home Will Not Sell

In most cases a seller is putting their home on the market to, well, get it sold quickly and for the desired amount. They want the best agent to help them get the most for their home while getting it off the market as soon as possible. Well, this is what you do, right? The only issue, they think their home is going to sell for more than it actually will. You know it will not sell at their set price, but they need detailed information on why it would sit in real estate limbo without realistic pricing.

This is where a thorough comparative market analysis will be very effective. Whether they are just putting their home on the market or have been listed for a while with no success, a market analysis will help them understand what price their home should be listed. In most cases, a client will see the light (sometimes aggravatingly) and realize that their mindset needs adjustment.

Missing Your Target Online Audience

Effective online marketing of a home is important in the efforts to get it sold. Buyers have thousands of listings at their fingertips when they fire up their computer. It has ultimately changed the game in how consumers are searching for the home of their dreams.

The fact is, overpricing your home can limit the online views of your home. The capabilities of a buyer targeting exactly what they want are limitless in the home buying process, including desired price. Having your home listed for too much can have a potential buyer scrolling on to the next listing. Being competitive online is crucial. Having other homes in your area that are properly priced listed  above and below an overpriced listing will have it lost in the shuffle. In most cases, you home will not show up in a buyers search when they are seeking the price in which your home should be listed.

Issues with the Appraisal

Finding a buyer is (somewhat) possible with an overpriced listing. But, when the appraiser determines that it is not worth the asking price there will be some issues. Once the appraisal reveals that the home is being sold for more than they deem worthy, your deal could fall through leaving you frantically searching for another buyer. This means the process will begin all over again and, more time your home sits on the market.

This is something that the client needs to know on the front end. They need to know that you have their best interest in mind from the beginning. Having a deal fall through because the appraisal comes in much lower than expected will cause major unneeded frustration. It can be very effective to help explain how an appraisal works as well as what happens when the appraisal is rejected.

Selling a home is not an easy task. But, overpricing a home will only stall any efforts in achieving a successful sale. As an agent, this will be a common hurdle to jump with sellers. But, educating them on the negative impacts of an overpriced home could allow you to effectively do your job as an agent.