Five Signs Your House May Be Overpriced
As we head into the Charlottesville area 2014 Spring Market, buyers are paying attention to what inventory is available and which listings are truly making an effort vs. the ones that have been languishing for some time.
Most sellers are anxious to make a good first impression and get their house sold quickly, but a few hold out as they may be emotionally attached to their homes and have priced them accordingly with little regard for the current market, sold listings nearby and comparable listings in their neighborhood.
As we have stated previously, if a seller has had their house on the market for several months or if they have priced their home too high, many buyers will not even look at or find it in their search results. If a seller prices their home too low, buyers will think there is something wrong with the home, area or worse – and the seller may think they’ll be leaving money on the table.
How can you tell if your house is overpriced?
Below are five signs that you may miss the spring market, or any market, if you don’t take corrective action now.
1. Your house has been sitting on the market for several months or more and has had very few showings, while similar listings nearby have either had many more showings or have already received an offer and sold – you may even think it’s because your listing agent is not advertising your house enough. In this case, if your agent is not paying attention to the new listings/homes that have gone under contract/sold data every day, you may never know that your listing price is too high.
2. You see that there are other listings in town that have high listing prices and think your house should compare with those – or you don’t want your house to be listed too low so you miss your desired buyers, but you’re still not getting any buyers looking at your listing. Homes sell at a price a buyer is willing to pay and a seller is willing to accept. If a home is priced too low, the seller should receive multiple offers to drive up the price to market value. The danger lies in pricing it too high and selecting your agent solely on opinion of value. It is critical to not confuse Active Homes on the market with Sold Homes. The Sold data shows a much closer view of the current market conditions. Active listings are often overpriced or a seller’s illusion of the value of their home, especially if they have been on the market for some time.
3. You’re not in a hurry to sell so think it’s okay that no one has come to see your house. Many sellers may think they have “time” so will overprice their home and will wait for the right buyer. If the market is in an upswing this may make sense. If the market is in a downtrend, however, you will be chasing the market. Certainly our Charlottesville Real Estate market is in better shape than the national numbers, but this is again where a seller needs to use common sense.
4. You think all of the improvements you made should justify a higher listing price, even though they might not be what buyers are looking for in a house or might be what buyers would expect to have changed. Pricing a home is only an educated guess and the market will dictate the price, but if you arrived at your listing price by calculating what you paid for the home, and then added such improvements as a pool, new septic system, custom painting with colors not seen in nature, new water pipes or a home theatre, you may not realize that many of these improvements may not coincide with what a buyer is actually looking for or what he or she might think is a given in a home, such as working pipes and a septic system. Not everyone needs a home theatre experience or a room the shade of chartreuse or yellow only seen on Sesame Street.
5. You keep hosting Open Houses, but no one shows up. You’re emotionally attached to your home and are not thinking like a buyer who is going to purchase your home. Putting yourself in a buyer’s shoes will give you a realistic perspective of your home’s true value. Buyers have choices of home style, price ranges, area, schools and, of course, condition of properties, and will not bother with your listing if they can find a similar listing for less.
If you have been getting very few showings, have not received an offer and constantly are being told that your home is overpriced you really need to listen to what the market tells you it is worth or you shouldn’t have it for sale.
The common factor in all the five steps above is related to the agent you choose. This is why if you are truly interested in selling your home you want to work with someone who has a track record of actually being successful at their craft like Charlottesville Solutions. An agent who intentionally overprices your home is not working in your best interest as a seller. You can make up all the excuses in the world why your home isn’t selling, but at the end, 9 times out of 10, it is the listing price.
At Charlottesville Solutions, we are actively looking at new listings, homes that have gone under contract and sold data every day. Our Solutions Agents are showing and seeing these homes first hand. This information is critical in helping our sellers with pricing their homes properly. Sure, we look at comps, square footage, number of beds, baths, acreage and area, but first hand knowledge of these homes is a lot different than just looking at photos that are meant to show a home in its best light.
Many sellers also don’t take into consideration the cost of the extra mortgage payments paid while the house is still on the market and the uncompensated hassle of trying to keep a home “show ready.” If a house has been on the market for three months or more, it affects the value that a buyer ultimately chooses to pay because it’s not a fresh listing anymore. It’s now a dated market-worn home that was overpriced for too long. Don’t let this happen to you.