Pros and Cons of Overpricing Your Home For Sale
Are you planning to sell your home but unsure about the selling price? It is important that you understand the factors that may influence the value of your property.
Factors that influence property value
To help you decide, here are a few factors that may affect the appreciation or devaluation of your property:
This is probably one of the biggest factors to determine the value of your home. Is your property near business districts, shopping centers, and public areas? Taking into consideration that your house may be proximate to these areas, how accessible is public transportation from your house?
Changes within a particular location may also affect property value, most especially with regards to the development that can help to provide economic stability. For example, a rural town converted into a business or shopping district may improve the zoning value of the properties in the said locality.
2. Weather conditions
Does your property always experience natural disasters like flooding? Does it fall near a fault line that may have caused cracks and chips during an earthquake?
The buyer’s concern would be safety and stability. The natural weather situation in the vicinity of your house may affect the cost of your insurance, should they know the condition of the property.
No matter how old your property may be, keeping it well-maintained may give it a value at par with a newly built residential space. There is a good chance that your house can be sold immediately when prospective buyers come to see the house well-kept.
The size of the home may affect the value of your property. Renovating the house may help increase the property value.
5. Home improvements
Note that poor renovation may significantly depreciate the property value. For example, adding more bedrooms and bathrooms may increase the value of the home, while removing facilities or reducing the number of bedrooms may depreciate its value.
If you decide to make some home improvements prior to selling your home, know how much they would add up to the existing value of your property. The top-up value should at least be equal or more than what you will spend on improvements.
How Over-Pricing Can Affect The Sale of Your Property
Most sellers would probably want to get the most money out of selling their homes. However, not knowing how to properly price the property may lead to losing a lot of money.
Some of the bad reasons behind a decision on property value include the following:
- The cost of the new home you are moving in would require a huge mortgage.
- The decision to sell is based on personal attachment to the home.
It’s really not a good idea to guesstimate the value of your home and hope that a buyer would choose to close a deal. Here are some reasons why over-pricing the value of your home may make it more difficult to sell the property:
1. Real estate agents are better in this game.
Most homeowners are focused only on their own property while real estate agents breathe in numbers that affect the value of properties in the market. Because of this, realtors and real estate professionals have a better idea and a higher level of knowledge in terms of property value. If you set an excessively high price on your home, you will probably lose the competition against hard-selling real estate agents.
2. There are no value-adding features of the home.
You may have listed your property so that prospect buyers may start checking on it, but it won’t matter if your house does not contain value-adding features that will attract buyers. In other words, jacking up the home value requires enhancing the usefulness or beauty of the property.
Make your property as attractive as possible so that you can have the edge over other properties. In selling a property, you must realize that there is a need to make a few changes to make it more inviting. For example, you may want to repaint the whole house to make it look clean and new.
3. Wise-spending buyers might be put off.
Home buyers are wiser nowadays; their decision to buy is based on comparing properties being sold in the same area. Some of them may even resort to waiting a little longer for the next price reduction. This would mean that you would sit a little longer before your home gets sold.
If you do not make the move in cutting down the cost of your listed property, you may end up waiting too long. The grim possibility is that you get caught up with economic deflation, which means that buying of properties may not be as quick and easy, most especially for an over-priced property.
4. Longer waiting leads to extended upkeep.
Over-pricing your home may lead to having your listing stay for so long in the market. This may led you to miss out on keeping the property neat and clean.
Will you be ready when someone suddenly shows up to check your home? The high price you are offering may not be aligned to what the buyer would see when they visit your property.
It is best to take the advice of your real estate agent, who can help you in finding the right people to buy your property. Over-pricing will cost you more than you think, as it can depreciate the value of your property if you are left unaware of how the market moves nowadays.
If you need help in coming up with a selling price for your home, I would be more than happy to help.