Overpricing Your Property: What Sellers Need to Know

Want to Sell Your House in 10 Days or Less? Start With the Right Price.

What makes some properties attract serious buyers right away while others sit on the market for months?

One of the biggest differences is pricing.

Buyers compare your property with everything else available in their price range. When your price makes sense for the location, condition, and competition, you give them a reason to act.

An ambitious asking price may sound appealing. But if it keeps buyers away, what is that extra asking price actually costing you?

Could You Keep an Extra $33,460 in Your Pocket?

Every additional month you own the property comes with expenses. Property taxes, mortgage interest, insurance, utilities, association charges, and maintenance can continue while you wait for a buyer.

For this example, we use estimated carrying costs of $6,692 per month for an $850,000 house purchased with 20% down. Avoiding five additional months of ownership could save you $33,460.

That is an illustration, not a promise. Your savings depend on your actual expenses and how much sooner the sale closes.

The Highest Asking Price Is Not Always the Best Financial Result

Consider two sales at the same price: one closes sooner, while the other requires five more months of carrying expenses. The sale prices match, but the amount the sellers keep does not.

Even a higher offer can leave you with less if the additional expenses outweigh the difference.

Compare the sale proceeds after selling expenses and carrying costs, not just the number on the offer.

Why Properties Start Out Overpriced

Here are three common reasons a property starts out overpriced:

1. No clear pricing presentation: Did your agent prepare a Comparative Market Analysis and explain the relevant recent sales, competing listings, and differences in condition, location, and features? You should understand the facts behind the recommended price.
2. Avoiding an honest conversation: Is your agent telling you what the market supports, or simply agreeing with the price you want to hear? You need candid advice, even when the recommendation is lower than you hoped.
3. Dismissing the market evidence: A seller may question whether an agent is recommending a lower price simply to make a quick sale. That is why the recommendation should be supported by facts. Ask your agent to explain the comparisons and how they apply to your property.

Common Pricing Objections

1. "One agent gave us the highest listing price.": Choose your agent for their experience, market knowledge, communication, and marketing plan. The highest suggested price is not necessarily the best-supported price. Ask each agent to show you the evidence behind the recommendation.
2. "We can always come down on our price.": You can reduce the price later, but that does not recover the time or buyer interest already lost. Repeated reductions and a lengthy time on the market may lead buyers to question the property's condition or expect further concessions. An overpriced home does not always sell below market value, but starting too high can weaken your position.
3. "We could try it for a couple of weeks.": A new listing is an opportunity to attract buyers who are already watching the market. If the price discourages them, a later reduction may not bring every one of them back. Put your strongest pricing and marketing strategy in place from the start. It's like having a dinner party on Saturday and having the caterers come on Monday.
4. "But we have so many improvements in it.": Improvements can add value and make a home more appealing, but buyers do not necessarily pay back every dollar you spent. Their contribution depends on quality, condition, usefulness, and what buyers value in your market. Personal upgrades should not automatically be added to the asking price at their original cost.
5. "But we paid more for it.": What you paid does not determine what buyers will pay today. Like other investments, a property's market value can change. Today's price should reflect today's market evidence.
6. "They can always make an offer.": Buyers commonly search within a set price range. An asking price above that range may keep your home out of searches by buyers who could afford it at a realistic price. Buyers shopping in the higher range may expect more than your property offers. Instead of attracting an offer, an overpriced listing can make a competing home look like the better value.

Price With a Plan

We will review comparable sales, competing properties, your home's condition, and your goals. Then we will discuss a price designed to attract serious buyers and a strategy for responding to the market.

Let's review your property, estimate your monthly carrying expenses, and compare your options.

Craig A. Scher - NYS Licensed Real Estate Broker
917-921-4934
Contact Us for a Free Consultation