Of course, the goal of selling your house is to get the most money you can. Given that, its often very tempting to overprice your house, as your rationale is that you might score big. This doesn’t mean testing the market by setting your home’s price above what the house is worth, just to “see what happens,” is a good strategy. In fact, there are many reasons not to test the market this way. See: Reasons Sellers Give for Overpricing Their Homes.
You are actually helping other sellers. It’s great to be a good neighbor, but unintentionally sacrificing your sale to help your neighbors sell their homes might be going a bit far. When you price too high, you’re actually helping sell the other homes in the neighborhood that have listed for less. After seeing your high-priced home, buyers may be eager to get the better-value house nearby; even if they liked your home better.
Buyers won’t take you seriously. Buyers are savvy. They’ve usually done the research and have a ballpark idea of what homes in your neighborhood are worth. When you price too high, sellers might not even look at your property. Read on: Five Signs Your Home is Overpriced.
Not everyone likes to play games. A common reason sellers price high is that it leaves room for negotiation. The problem with this tactic? If buyers overlook your house because it’s out of their budget, there will be no one to negotiate with. While some buyers might enjoy the negotiation process, a solid buyer respects and appreciates a home priced just right.
False hope. Some sellers who price high are given false hope by agents who are uncomfortable telling their clients the truth. Some agents may agree to any price you want just to get their sign on your lawn.
Wasting time. Sellers are in the driver’s seat the first 30 days a house is on the market. The listing is still new, so you have buyers’ attention. The ideal scenario is that you price to sell in the first two weeks, so that you get multiple offers. When you price a home too high, you waste the most precious time available.
Your house gets stagnant. If your house is on the market longer than 30 days, buyers will start wondering whether something’s wrong with it. When you price your home too high, all you’re doing is putting blood in the water for the sharks who will wait until you lower your price. And here’s the real problem: When you do drop the price, you often get less for your house than if you offered a realistic price from the start.
You take yourself out of the game. People generally set up search parameters by price when looking online for a home. If the house were priced properly, it would show up in the buyer’s search results.
They’ll find out you’re greedy anyway. If you’re selling to buyers who are getting a mortgage (mainly most buyers), the lender will need an appraisal. If comparable home sales over the last six months and current market conditions don’t support your sales price, then your buyer won’t get the mortgage.