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What You Lose When You Price Too High

Overpriced ListingsOften sellers are tempted to list their property at a much higher price than their Realtor recommends. It’s understandable, sellers have their heart and money invested in the property and they want to get the most out of it. Many will try to do their own research to determine the value of the property. These days there are some great online tools to use. Zillow even provides their handy “Zestimate.” That can be a number to consider but it’s often not accurate. The Zestimate is based on public records and does not take into account things like recent updates or needed updates and repairs.

In the end, remember why you chose to use a Realtor in the first place. Valuation of real estate is only one part of the professional services we provide. Although Realtors don’t have all the tools an appraiser may have, we do have great professional tools to assist us in coming up with a property value. Personally, I do my absolute best to come up with a price range that closely approximates what I believe an appraiser will come up with. I’m usually spot on and most of my listings sell within 5% of list price.

Occasionally I will get a seller who insists on listing for higher than I suggest. I then explain the dangers of listing too high. What you lose when you price too high is not money but time. Buyers and their agents will know if your property is overpriced because they just saw the property next door. So, of course the property next door will get the offer, not your overpriced listing. And so, you have to decide whether or not you have the time to wait as the other properties around you sell.

I’m fine with listing perhaps $5000 too high. That’s within the realm of reason. Either way, I will tell the seller we can list at the price they choose but I will be asking them to drop the sale price several thousand dollars every two weeks if no offers come in.

I recently had a listing that was on market for 137 days. I have NEVER had a listing take that long to sell. In my opinion, we started off listing about $20,000 too high and the seller wouldn’t let me lower the price for two months. Eventually we lowered the price near the range I had initially suggested and that’s when we finally got an offer.

Moral of the story: listen to your Realtor. If we believe it could sell for more, we’d be happy to make a higher commission. We’re professionals and we’re realistic. We know it ultimately needs to appraise at the sale amount — even if by chance an offer comes in at the unrealistic price — then we may face a problem at the appraisal stage and have to renegotiate.

Call me for a free, no obligation valuation of your property: 407-236-6559. It would be my pleasure to be of service.