The Potential Costs of Overpricing Your Home

The Potential Costs of Overpricing Your Home

Estimating your home’s worth is tricky! You might think the value of your listing falls within a certain range, and it can be tempting to list your home right at the high end.

But that can actually end up costing you by turning off potential prospects. There’s a lot to consider – and a lot of ways you can go right or wrong in the pricing process.

Why overpricing your house could cost you:

If you start out with a listing price that’s really beyond what it should be, you might cut the pool of prospects from the start.

People are likely setting their search filters based on price, bedrooms, bathrooms, etc. — so if your listing price isn’t aligned, many potential buyers won’t even see it in their search results.

And if you’re in a market where home prices often escalate, prospects might rule out your house even if it falls within their budget, because they assume they’ll lose to higher offers. With fewer showings, you’re less likely to generate the type of competition that could drive up the sale price.

By overpricing your house, you also could be helping your neighbors sell their houses faster. A similar house down the street suddenly looks like an amazing deal if the price tag is a lot lower than yours.

Overpriced homes are also at high risk of going stale. The longer your house stays on the market, the more suspicions prospects will begin to have.  You might know it’s the price, but buyers might think there is something physically wrong with the home — and then take that as a signal to stay away.

How to make sure you’re getting your home value estimate right:

1. Ask your agent to run a rapid CMA through Homesnap.

One of the best ways to accurately price your home is seeing how similar homes near you have sold.

Your agent can run a rapid CMA (comparative market analysis) through Homesnap, so you can see how houses of similar size, age, neighborhood, and other factors have been priced recently.

Your agent will also have a lot of recent experience with your particular market, so can offer some informed advice about how to price your home.

For more info, check out our article: 5 Ways to See How Much Your House Is Worth.

2. Be self-aware.

Your emotional investment in your home can also lead you to overestimate the house worth. Remember, feelings don’t transfer to buyers. They’ll develop their own feelings and thoughts about a house based on what they actually see.

3. Don’t rely 100% on third-party search portal estimates.

Many third-party search portals offer home estimates, but be sure to talk to your agent to get a more concrete estimate that is specific to your neighborhood and market.