Your home is overpriced. This is really a very simple concept that sellers have a hard time grasping. Sellers treat their homes like they are their children. “My kid can pop a wheelie on his Schwinn”. “My kid’s birthmark is in the shape of the Easter Bunny”. “My kid can stand on his head for 20 seconds while singing Twinkle, Twinkle, Little Star”. Yes, yes, that is very nice. However, like anniversaries, no one cares but you.
Let me lay out some simple facts about real estate that may make this bitter pill a little easier to swallow:
1) With the invention of the internet we now see very educated buyers. They shop for homes by comparing them side by side. If your home looks very similar in age, area, and size but is $10,000 more; they aren’t even going to look at it. They will delete it immediately while muttering things like, “They’re high”!
2) Let’s pretend that you do find a buyer who wants to pay asking price for your overpriced home. Most buyers must qualify for a loan to purchase your home. In order for that to occur, the home must appraise for the amount of the sale. Appraisers use recent homes that have sold in the area for their comparables. Guess what? If you’re home isn’t close to the other sold home’s prices, there is a flag on the play and the game is over.
3)“But I have Ralph Lauren paint, 18 inch tile floors, solid gold nails in each stud, and 3 inches of extra insulation in my attic”! Yes. Your home is lovely. But these items don’t add real value to the home. In order to get additional money you need to add square footage, finish a basement, or add on a garage. Facelift items will help your home sell faster than one down the street that isn’t as pretty, but is priced the same.
4) Speaking of homes down the street…your neighbor loves it when you overprice your home. You’re his competition and you’re helping him sell his house. So, if the listed house 3 houses down sends you a fruit basket and a “thank you” card, you may be overpriced.
5) The longer your home sits on the market, the more buyers will wonder what’s wrong with it. “Does it smell like cats”? “Do smokers live there”? "Is it haunted"? Even if you have dropped your price into the range it should have been in at the beginning, you will probably get lowball offers. Your negotiating position is highest when your home is new on the market.
6) Your home has expenses no matter who owns it. The mortgage is hungry, the power is on, the gas is running, the lawn needs mowing and the snow needs to be shoveled. If you’re a proud owner in a Home Owner’s Association, then you are also paying monthly HOA fees. Not to mention the fact that the state tax man will have his hand out as well. Since you’re going to have to lower your price to get it to sell anyway; why not do it in the beginning and save yourself some cash?
