Selling? Don’t Ask for Too Much
There are, understandably, reasons why a seller may want to price their property high. Maybe you want to try and make the highest profit possible from the sale, or leave room for negotiation. Or maybe the sentimental memories you attach to the property give it more value in your perspective. Whatever the reason, overvaluing your property, though very tempting, can actually end up losing you money – here’s why.
Nearby properties of similar merit (but much lower price) will be selling left and right while yours gets no offers. Your property may have recent upgrades, or more storage space, or better parking, but the fact is that when a buyer sees a property that they feel is a better value, they’re much more likely to purchase that instead.
Let’s say you priced high to leave wiggle room for negotiators. Unfortunately, there’s a chance those negotiators may miss your listing completely because they only searched for properties within a specific price range that they would be willing to pay. Maybe you would have sold it to them within their budget, but they don’t know that – because they didn’t even see it.
One of the biggest issues with overvaluing is that it may cause your property to languish on the market. Time is money when it comes to selling your property! Once you pass the initial 30 days, your listing may even come across as suspicious if it hasn’t sold yet. You may ultimately end up having to sell for a lower price than you would have if it were priced correctly from the beginning.
So you priced high, and your property sold anyways. Hooray! Unfortunately you still aren’t necessarily in the clear. During the loan process, the property will require an appraisal if the buyer is financing the purchase (which they almost always will). If this appraisal comes in too low, the lender may not authorize the loan unless the buyer covers the difference in cash – which may or may not happen. You certainly wouldn’t want the sale to fall through, would you?
The bottom line is, as much as you may want the extra profit, you are going to be much better off pricing your property correctly from the beginning. The selling process will move much faster and smoother, and you can save yourself some grief and anxiety!