Is the Asking Price Too High for Your Home?

Selling a house can be an emotional experience. The moments and memories you’ve made there can create a bond that is tough to break and extends beyond monetary value. Unfortunately, while enjoying a full, rich home life is great for your wellbeing, it can impair your judgement when it comes time to move on.

When it comes time to sell, setting your asking price based on sentimentality is a risky proposition.  If the real estate market is on the upswing it tends not to matter if a home is overpriced, however once the market is on the decline any price inflation can have negative repercussions and cost you serious money. As such, it’s important to remain objective and consult the resources at your disposal.

Asking for noticeably more than nearby properties is a definite sign you’ve overpriced your home. This is why a good realtor will research what comparable homes are selling for in your area before recommending a pricing strategy. It’s a good idea to do some research on your own into what’s been selling in the neighborhood over the previous month or two. There are also some tools that can provide pricing estimates based on different aspects of your property, such as zip code, that can give you an idea of what the market looks like. This background info will help you work with your realtor to settle on a realistic price.

Receiving competitive bids on your house is usually a sign that the asking price is reasonable, so if you have yet to receive an offer after a few months on the market then it may be time to rethink your pricing strategy. Additionally, if there aren’t a lot of showings scheduled right after the house goes on the market, then there’s a good chance realtors and potential buyers feel the price is too high and don’t want to waste their time.

In each case, it’s usually a good idea to lower the asking price to increase interest. However, you need to react quickly in these situations or else you risk losing momentum completely, which could lead to a prolonged stay on the market and additional price reductions later on.

There are a lot of outside variables to consider that can dictate if your asking price is too high, many of which are often out of your control. If there are an abnormally large amount of sellers in the same price range or opportunities for buying foreclosed homes at a deep discount in the area, then you will have trouble selling if your home is even slightly more expensive than the competition. Additionally – depending on the price range of the home you’re selling – you run the risk of unintentionally excluding quality prospects. For instance, the limits for using a first time home buyer grant to purchase a house vary in each state, so an inflated price could immediately disqualify an otherwise interested buyer.

Real estate markets are constantly changing, and accurately pricing a home is a moving target that can vary greatly over time. With such complexity, it’s important to pair any personal feelings about your house with due diligence as well as insight from knowledgeable professionals to get an accurate picture of your home’s current value. With an effective pricing strategy you put yourself in the best position to get your house sold quickly for a fair price.