Fab Real Estate Blog: Dangers of Overpricing

Dangers of Overpricing

I completed my monthly statistics for homes sold in Danbury, Connecticut during the month of November, 2007.

On average, homes sold in 170 days, and closed for 95.4% of their most recent list price.  This is fairly typical for our area.

Several homes, however, sat on the market between 300 and 500 days before selling.  This is far too long for a home to sit without selling in our market.  So, I looked a bit further at these homes:

On average, these homes sold for only 77% of their list price.

That is too low.  Why did they sell for so much less than their list price?  Why did they sit on the market for so long before selling?

Because they were overpriced.

Pricing your home for sale for anything above its current market value will not sell your home.  No matter how much money you want to sell your home for, it will only sell for its current market value.  If you overprice your home, you will then be faced with a very long marketing time, as is indicated above, and most likely a much lower price than you would have received originally.  Buyers see price reductions and long marketing times as desperation by the sellers.  They will try to take advantage of that.

Want to sell your home?  Price it right.

I've written about this before.  Take a look:

The Importance of Price

Days on Market: It's a Matter of Price

 

Don Fabrizio-Garcia, REALTOR
Connecticut Real Estate & Appraisals
CT Home Group
Keller Williams CT Realty
203.746.1199
Connecticut Real Estate and Homes for Sale

Comment balloon 6 commentsDon Fabrizio-Garcia • December 30 2007 10:04AM

Comments

Pricing really is everything. I just viewed a home for an agent friend and depressed her by listing all the reasons the home was overpriced. Ironically she had 2 others look at it and we were all within 1 pwercent of each other on price
Posted by Charlie Ragonesi, Homes - Big Canoe, Jasper, North Georgia Pros (AllMountainRealty.com) almost 10 years ago

Too few real estate agents understand pricing.  Or, they are willing to take overpriced listings for other reasons.

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 10 years ago
Charlie - Yes, it all comes down to pricing.  I've taken the overpriced listing in the past - and I learned my lesson fast.  It's not worth it, and you're doing a disservice to the seller.
Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) almost 10 years ago

Lenn - You are right - many agents do not understand pricing.  That's part of the reason I also obtained my appraisal license - to learn to better price properties.

Agents taking overpriced listings just to add to their inventory, or to have a sign in a yard (free advertising), or in the hopes of finding new buyer clients for other properties from that listing, is not what I consider representing the seller.

I know others take overpriced listings assuming they will just get price reductions in the future.  Again, while price reductions may become necessary in this market on any listing, going in with that being your plan is not proper representation.

Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) almost 10 years ago

A very smart man told me that everything has a price. If a house isn't selling, lower the price until it does. It seems too simple, but it always works.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) almost 10 years ago
Larry - Lowering the price to the "right" price does always work.  But, I try to price it right from the beginning.  Otherwise, we're just spinning our wheels.
Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) almost 10 years ago

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