Many sellers struggle with the price of their home. It’s easy to set the price too high, and it’s easy to justify it. But whether we like it or not, there are negative side effects to overpricing your home. In order to avoid them, let’s dispel the top 5 myths on this subject.

Myth 1. I Can Reduce My Price As Much As I Want

While this is technically true, it can come with a negative side effect. Numerous and frequent price reductions are often an indication of motivation. Many sellers who need to sell their house quickly show this type of behavior, and many buyers see it as a good opportunity to get a deal. So, while you can reduce your house in many, frequent, reductions, you increase your chances of being viewed as motivated and desperate. If you want to get the best price, this is not the position you want to be seen in.

Myth 2. People Will Still Offer and We Will Negotiate A Fair Price

The truth is, people in our culture don’t like negotiating. We do it in real estate because ‘that’s what’s done’, but for the most part we avoid it. If a buyer sees that your house is overpriced, they’re likely to assume that you won’t come down to a fair level, and they’ll probably pass you by. They’d rather spend their time looking at realistic prospects, which are always out there.

Myth 3. There’s Someone Out There Who Will Pay That Much

Yes, this might be true, but it’s very unlikely. The truth is, the majority of people aren’t going to take the biggest purchase in their life lightly. They will research everything to death and will uncover all facts they need to know. If they’re working with a realtor, which most buyers do, they’re guaranteed to know the fair price. Even if they do make an offer, the next myth usually stops them dead.

Myth 4. If I Get Someone To Accept My Price, the Deal is Done!

The truth is, your buyer is going to have to get a mortgage, and a bank will not lend more than the house is worth. The bank will come up with their own idea of market value, and will only lend based on that. Pretend you sold your house for $420,000, when it’s really worth $400,000. The bank will lend based on $400,000, and will require that the buyer pays the extra amount in cash. More often than not, buyers can’t afford this and the deal will collapse. Even if they could afford it, they will ask themselves why they’re paying more for a house than it’s worth.

Myth 5. I’ll Have The Same Amount Of Interest When I Reduce In a Month Or Two

On average, the most action you will have on any listing is during the first month. After that, it’s old news. Many buyers are automatically notified by email when a new listing hits the market. They’ll scan it, and decide whether or not they want to see it. If it’s overpriced, you risk having them dismiss it and look for something else. It’s absolutely critical to capture their interest while everyone is looking. This not only helps build a sense of urgency, but it gets the word out more effectively.

However you try to justify overpricing your home, there are a multitude of factors that begin to work against you. If you’re interested in maximizing your results, play the game to your advantage. Catch the buyers interest, make them feel good about your place, and then work your bargaining power! If you can do this, I you’re likely to win more often than not.

Author Bio: My name is Glen Murray, and I’m a Kamloops REALTOR. I deal in all types of residential real estate, but I specialize in residential real estate investors, detached houses, and condos in Kamloops. For more Kamloops real estate information, including listings, statistics, and economic indicators, please check out my website.

Category: Real Estate
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