Realtor Role

There is no exact price for real estate.  A realtor will not tell you what your home is worth because the market determines the value.  Together, you and a realtor will determine the price.  A realtor will bring the market, and the market determines the price.  

A realtor will show you a range of prices being paid for homes in your area. You determine the price based on factors that you control:  

§     Marketing Time

§     Financing Alternatives Provided

§     Condition

§     Exposure Methods

Risk of Overpricing

When you overprice your house, you risk losing potential buyer.  The higher the price above realistic market value, the fewer the buyers willing to consider your property.

Reasons of Overpricing

1. Over Improvement

Improvements should be made for enjoyment, not just resale.  You cannot add an item to a home, select it to your style, use it, then expect a buyer to pay the original cost.

2. Need

An owner's need for money does not increase the value of the home.

3. Purchasing in a higher priced area

Values are location specific.  High values in the destination do not increase the value of the existing home. 

4. Original purchase price high

Chances are you paid market value.  It's not a price that was too high, but a market that has experienced subsequent change.  

5. Lack factual data

Base your opinion on recent documented sale prices. 

6. Bargaining room

Buyers may offer low, but they will do that at ANY price.  It is easier to negotiate up to a fair market value than to an inflated price.  

7. Move isn't necessary

Even if the move isn't urgent, it is important to price correctly to preserve your marketing opportunities when the move becomes urgent.  

8. Corporate buyout

Third party companies purchase thousand of homes a year so the offer you receive is usually market value.  Market your home very close to that price.

When to Reconsider Your Asking Price

Pricing a house is the most important part of the marketing process.  You want to get as much for it as you can, but if the price is set to high, you'll attract the wrong buyers and only help to sell your competition. 

Every study on the topic reveals that the greater the percentage of overpricing the longer the property will take to sell.  Generally, the results are a diminished eventual sales price.  

Your realtor will show you the prices for which homes similar to yours have sold.  Remember, the final selling price of your home is not set by you or your realtor.  It is set by the buying public using their own value system.

If your home is overpriced, the marketplace will let you know about it.  If your property is aggressively marketed yet you have few initial showings and no second showings, there is a clear indication that the price may be one of the factors.