Is Your House Overpriced? Here's your Checklist of an Overpriced Property.
Home is where the heart is, that's why selling a home is a loaded and emotional experience.
All too frequently, properties are overpriced and as a result it takes longer to sell them and they often sell for less than their actual value. Sellers are emotionally connected to their homes and expect their homes to be worth more than the market is prepared to pay. Just as buyers do not have an emotional connection with a property and are often undervaluing a property. There needs to be a happy medium and by pricing your property right you will get more interest in the property which may result in several potential offers that ultimately creates a silent auction and this is when a property sells fast and over market value.
Here is your Checklist
1. Your Property Is Priced Well Above Neighbouring Properties
The first thing agents do before they recommend a price, is they look at the sales prices of the last three sales of similar sized homes in the your neighborhood.
2. After Two Month, You Still Haven't Received an Offer
After a couple months, you still haven’t received an offer. There should be several attendees at your open house and there should be interest and offers in the first four to six weeks the home being on the market if it’s priced properly.
A correctly-priced property won’t take long to start seeing offers; mostly within days or week from its initial launch!
If the home is going through the marketing process and the weeks or months are ticking by without a single offer, you might be dealing with an overpriced home!
3. The Online Marketing Isn't Getting Any Traffic
With the majority of today’s home buyers turning to online portals for property searching, it is imperative that the real estate agent knows how to efficiently market a property online, through the numerous property listing portals and mandatory social media exposure!
Having gone through the entire exercise to market the property, it’s really just a matter of hours before the first interested buyers start viewing the property online.
However, if you haven't had viewings in days or weeks after going live with the property listing, there is a serious problem!
This is a telling sign that the property is overpriced!
4. The Open For Inspections are Not Getting A Steady Flow of Viewings
As the homeowner you have finally decided to put the property on the market and you are nervous, excited, uncertain about what will happen during those first few weeks of marketing!
Open for Inspections are a pressure free environment for buyers to view the property, however, if the property is overpriced genuine buyers will not waste their time viewing a property they know is overpriced, genuine buyers are doing their homework, they are constantly looking at properties in your area and they a quick to notice an overpriced house. They are not only put off by the price, but when the property doesn't sell and the seller is forced to reduce the price, interested buyers are put off by the price reduction and this will put doubt in their mind. Pricing the property right the first time is crucial.
5. You have Only Received Low Offers
As explained in the point above, an overpriced home is unlikely to see any offer to purchase being presented any time soon!
Most home buyers will ask the real estate agent how long the property has been on the market. If the property has been on the market for several 6 weeks or longer the buyers start wondering why or they start thinking what is wrong with the property!
The thought process then turns to, if they have been on the market this long they might be desperate by now. Let us try to put in a low-ball offer!”
The market has spoken, and as the home seller of an overpriced home, you might not like what it’s telling you!
6. The Common Feedback is "Overpriced"
The real estate agent will try his utmost to get the word out on this property, and hopefully get potential home buyers interested in attending the open house events.
Your agent should be asking all buyers for feedback; what they loved about the property, liked, disliked, whether they would like to make an offer, what would they offer if they were to put in an offer etc.
If the property is indeed an overpriced home, almost all visiting buyers are likely to point out how they can buy more house for the same money a little further down the street.
Your agent will give you regular feedback at your meetings, you will quickly notice a similar pattern:
“The buyer loved the home and its many features, the local schools and shopping centres, however, the pricing of the property is a big concern, so they won’t be pursuing this house as a potential home.”
"The price is wrong."
"The houses in the area are priced much lower."
"The property value according to online research is overpriced."
You want to avoid the overpriced feedback at all costs, especially when the buyer can back this up with evidence of the local property sales and currently on market.
7. The Neighbouring Houses are Selling
It will be extremely frustrating for you to see your neighbouring properties for sale actually getting sold!
If you find yourself questioning your agent; “Why is their home selling and mine, which is much nicer, isn’t getting a single offer?”
Your house is most likely not selling because it is overpriced.
Advertising and Marketing Importance.
Marketing and Advertising is the most important part of selling your home, the right marketing campaign with the right pricing will attract the genuine buyers.
Owners often feel that trying a higher price in the first few weeks will be the best marketing plan. The first 4 weeks of marketing and advertising are the most crucial, if you get it wrong in the first few weeks, you are not likely to get the right buyers or the right offers. Often home owners think, what if, I can get $50K over market value, the fact is that even if someone is willing to pay 50K over market value, their bank or lender won’t loan the money if the value isn’t there.
The bottom line is, almost always, an Over Priced House will sit on the market longer and sell for less than it should have had it been priced strategically from the beginning.
It's clear you need to be 'IN THE MARKET' not 'ON THE MARKET'.
