The Biggest Mistake Real Estate Sellers Make
In all the years that I have been involved in real estate sales, I have never seen a more price sensitive market than the one we have had in the last twenty-four months.
During that time, I have seen seller after seller make the most deadly mistake in real estate: They overprice their property.
Sometimes they overprice it because they feel that their property is "special" and should command a higher price. Sometimes they overprice it because they got inaccurate information about what a nearby neighbor's house sold for. Sometimes they overprice because they feel they need some "wiggle room" to negotiate with a buyer. Sometimes they overprice because they don't believe the advice of their real estate agent. Sometimes they overprice just out of pure greed.
It really doesn't matter why they overprice. It's always a deadly mistake.
When they are told that the property is overpriced and needs to be reduced, sellers usually come back with the same lame comment: "Well, buyers can always make an offer, right?"
Well, here are some facts about overpricing that most sellers need to know -- and it's why buyer's sometimes choose not to make an offer ...
1. In a buyer's market like we have today, the competition to sell a property is steep and buyers have options. There are probably numerous homes and condos similar to yours on the market today. The home that is the best value is the one that will sell. Overpricing is a virtual guarantee that you will turn off buyers and they will move on down the road to a property that may be similar to yours but priced more attractively. As a result, overpriced properties remain unsold for long periods of time.
2. Today's buyers are well educated and patient. By well educated, I mean they have gone on-line and done their property searches often without the aid of a real estate agent. They know what's on the market and they know what the prices are for similar homes in various neighborhoods. Buyers today are smart and savvy. If your house is overpriced, they won't even bother to come in to look at it because they've already got a lead on several others that are similar to yours and more attractively priced. By patient, I mean that if a buyer decides they want to buy your house but you are overpriced, they'll simply wait for you to cut your price. After all, if they don't get your house they'll probably get one similar to it. So, they have the luxury of waiting.
3. A lack of offers is the market talking. If a seller overprices a property, the market is going to put the correct price on it for him. They do that by not making offers on the overpriced property. When a property is not getting any offers, the market is saying "we're not interested in that property at this high price". Smart sellers listen to the market and act accordingly.
These days, you have to place the right price on a property in order to sell it in a reasonable time period. What's a "reasonable" time frame? I like to see property sell in less than ninety days myself, but after sixty days I'm already thinking that it's overpriced and the market wants to see a downward adjustment.
Happy Selling!
During that time, I have seen seller after seller make the most deadly mistake in real estate: They overprice their property.
Sometimes they overprice it because they feel that their property is "special" and should command a higher price. Sometimes they overprice it because they got inaccurate information about what a nearby neighbor's house sold for. Sometimes they overprice because they feel they need some "wiggle room" to negotiate with a buyer. Sometimes they overprice because they don't believe the advice of their real estate agent. Sometimes they overprice just out of pure greed.
It really doesn't matter why they overprice. It's always a deadly mistake.
When they are told that the property is overpriced and needs to be reduced, sellers usually come back with the same lame comment: "Well, buyers can always make an offer, right?"
Well, here are some facts about overpricing that most sellers need to know -- and it's why buyer's sometimes choose not to make an offer ...
1. In a buyer's market like we have today, the competition to sell a property is steep and buyers have options. There are probably numerous homes and condos similar to yours on the market today. The home that is the best value is the one that will sell. Overpricing is a virtual guarantee that you will turn off buyers and they will move on down the road to a property that may be similar to yours but priced more attractively. As a result, overpriced properties remain unsold for long periods of time.
2. Today's buyers are well educated and patient. By well educated, I mean they have gone on-line and done their property searches often without the aid of a real estate agent. They know what's on the market and they know what the prices are for similar homes in various neighborhoods. Buyers today are smart and savvy. If your house is overpriced, they won't even bother to come in to look at it because they've already got a lead on several others that are similar to yours and more attractively priced. By patient, I mean that if a buyer decides they want to buy your house but you are overpriced, they'll simply wait for you to cut your price. After all, if they don't get your house they'll probably get one similar to it. So, they have the luxury of waiting.
3. A lack of offers is the market talking. If a seller overprices a property, the market is going to put the correct price on it for him. They do that by not making offers on the overpriced property. When a property is not getting any offers, the market is saying "we're not interested in that property at this high price". Smart sellers listen to the market and act accordingly.
These days, you have to place the right price on a property in order to sell it in a reasonable time period. What's a "reasonable" time frame? I like to see property sell in less than ninety days myself, but after sixty days I'm already thinking that it's overpriced and the market wants to see a downward adjustment.
Happy Selling!
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posted by Terry Ward at 6:33 AM
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