Why Sellers Overprice Their Homes

Every real estate agent agrees that overpricing your home will make it harder to sell and will cause it to eventually sell for less money than what it is actually worth.
Yet, sellers ignore them and continue to overprice their homes. Why do they do it? Many reasons:

  • They don’t want to bring money to closing
  • They feel their home is superior to other similar homes
  • They want a return on improvements and repairs
  • They want a bigger, more expensive home
  • They think buyers want to negotiate
  • They think that real estate agents can get it sold for more if they just work a little bit harder.

Yet not one of these reasons has anything to do with the actual current value market of the home.

According to a study from Zillow.com, sellers often base their asking prices on their original purchase price. Essentially, they want to live in the home for a number of years then sell it for more than they paid for it.

While that is understandable, the market doesn’t always cooperate. Buyers might not like the improvements made to the home or the neighborhood is not as popular and valuable as it was at the original time of purchase.

Setting a high price with wiggle room to reduce the price later is not a successful strategy. It may get you showings, but not often will it get you offers.

Instead, price your home just under break points. For example, $249,000 instead of $255,000 could help you get a full-price offer from a buyer that recognizes your home is a good purchase.