Facebook
Twitter
Pinterest
Copy Link
5 Dangers of Overpricing a Home
It is still a great time to be a seller, but in much of the Western U.S., the local real estate market has begun to soften. With significant increases in inventory, buyers now have more choices and less sense of urgency. If you are thinking about selling your home, pricing it correctly the first time is critical. Here’s why:
-
If you overprice your home, it won’t show up in some search results.
Buyers search for homes using the parameters they desire. Price range is one of the most critical. If you set an unrealistic price of $850,000 for your home, all the buyers searching for homes up to $825,000 will fail to see your property in their search results.
-
An overpriced home attracts the wrong buyer.
An overpriced home will not compare favorably with the realistically-valued homes in a buyer’s price bracket. If your home is missing the amenities, square footage or other features of homes within the price range you’ve placed it in it won’t sell.
-
Overpriced homes linger on the market and risk becoming “stale”.
The interest in a home is always highest when the listing first hits the market. When an overpriced home goes unsold for a long period of time buyers often wonder what is wrong with the property. When a buyer moves on from a listing they rarely come back, even if you drop the price.
-
You run the risk of getting less for your home than if you priced it correctly the first time.
A Zillow study showed that homes that linger on the market tend to sell for significantly less than their listing price. When a home sits on the market for an extended period of time, buyers feel they have lots of room to negotiate.
-
The longer your home remains on the market, the more expenses you incur.
Every month your home goes unsold you put out money for mortgage payments, utilities and other home expenses that you will never recover.
Setting a realistic price for your home from the start is critical. If you’re thinking of selling, our highly trained experts at Windermere Real Estate can provide you with a comprehensive pricing analysis based on current market conditions.
How Staging Your Home Well Impacts Its Value
For more than 20 years, the benefits of staging a home have been well documented. Numerous studies show that staging helps sell a home faster and for a higher price. According to the National Association of REALTORS®, 88 percent of homebuyers start their search online, forming impressions within three seconds of viewing a listing. When a home is well staged, it photographs well and makes the kind of first impression that encourages buyers to take the next step.
Studies also indicate that buyers decide if they’re interested within the first 30 seconds of entering a home. Not only does home staging help to remove potential red flags that can turn buyers off, it helps them begin to imagine living there. Homes that are professionally staged look more “move-in ready” and that makes them far more appealing to potential buyers.
According to the Village Voice, staged homes sell in one-third less time than non-staged homes. Staged homes can also command higher prices than non-staged homes. Data compiled by the U.S. Department of Housing and Urban Development indicate that staged homes sell for approximately 17 percent more than non-staged homes.
A measurable difference in time and money
In a study conducted by the Real Estate Staging Association in 2007, a group of vacant homes that had remained unsold for an average of 131 days were taken off the market, staged, and relisted. The newly staged properties sold, on average, in just 42 days, – which is approximately 68 percent less time on the market.
The study was repeated in 2011, in a more challenging market, and the numbers were even more dramatic. Vacant homes that were previously on the market for an average of 156 days as unstaged properties, when listed again as staged properties, sold after an average of 42 days—an average of 73 percent less time on the market.
Small investments, big potential returns
Staging is a powerful advantage when selling your home, but that’s not the only reason to do it. Staging uncovers problems that need to be addressed, repairs that need to be made, and upgrades that should be undertaken. For a relatively small investment of time and money, you can reap big returns. Staged properties are more inviting, and that inspires the kind of peace-of-mind that gets buyers to sign on the dotted line. In the age of social media, a well-staged home is a home that stands out, gets shared, and sticks in people’s minds.
What’s more, the investment in staging can bring a higher price. According to the National Association of REALTORS, the average staging investment is between one percent and three percent of the home’s asking price, and typically generates a return of eight to ten percent.
In short, less time on the market and higher selling prices make the small cost of staging your home a wise investment.
Interested in learning more? Contact your real estate agent for information about the value of staging and referrals for professional home stagers.
