A well-priced home
In order to price a home professionally, a Realtor will normally perform a market analysis. The Realtor will do the essential research in order to get the best price in the shortest amount of time. This assessment is called a “market analysis” and it guards against overpricing a listing. A market analysis usually shows the sales prices comparable homes that have sold and closed within the last six months.
It will also show the list price of comparable homes that are currently on the market. Often, a market analysis will show the listing prices of comparable homes that did not sell during the terms of the listings and demonstrates the folly of overpricing a home for sale.
Finally, homes that have pending sales or are under contract should be listed along with a recommended asking price of the home. It is evidence of the market value of the home and it is proof that the r Realtor is knowledgeable.
A home that is listed at a price that is higher than the market analysis has established is usually overpriced. It will not sell to a qualified buyer at a price higher than the market has established. In the unlikely event an overpriced home sells too high, it will not appraise and there is a high risk of buyer remorse.
More often, if the gap between the value established between the market analysis and the asking price is too much, no one will even look at the overpriced home and the time when the home could have been sold at a fair price is gone. A market analysis is based on recent market conditions. It represents a window of opportunity and establishes an estimate that a seller will receive if the seller makes the property available within the parameters of the market analysis.
An overpriced listing will not result in a closed sale. Living in a home that is on the market is stressful. The months spent keeping the home tidy and prepared for showing is wasted.
The Pitfalls of an Overpriced Home For Sale
In all markets, the value of a home is defined as what a ready, willing and able buyer is willing to pay. An overpriced home will be a turnoff to qualified buyers. A serious seller will not overprice his home to sell because of the following risks:
• A new home or upgrade cannot be purchased. The opportunity to own the upgraded home is gone.
• If the sale is needed because of a job transfer, a move must be made and the home that is on the market is left behind. Choices for housing in the new location are severely limited. Energy that should be spent on a new job is compromised.
• Until an existing home for sale is closed and funds are released, a normal life is in upheaval. Entire families hover in a state of uncertainty. Marital separations and emotional problems suffered by children are common and fade away once a home is sold and relocation is completed.