If you and your agent have overpriced, fewer agents
will preview your home. After all, they are Realtors,
and it is their job to know local market conditions and
home values. If your house is dramatically above
market, why waste time? Their time is better spent
previewing homes that are priced realistically.
Dropping Your Price...Too Late
If you start out with a high sales price, then drop it
later -- your house is "old news." You will never be
able to recapture that flurry of initial activity you
would have had with a realistic price. Your house
could take longer to sell.
Even if you do successfully sell at an above market
price to an uninformed buyer, your buyer will need a
mortgage. The mortgage lender requires an appraisal.
If comparable sales for the last six months and
current market conditions do not support your sales
price, the house won’t appraise. Your deal falls apart.
Of course, you can always attempt to renegotiate
the price, but only if the buyer is willing to listen.
Your house could go "back on the market."
Once your home has fallen out of escrow or sits on
the market awhile, it is harder to get a good offer.
Potential buyers will think you might be getting
desperate, so they will make lower offers. By
overpricing your home in the beginning, you could
actually end up settling for a lower price than you
would have normally received.
