Home Sellers Pitfalls of overpriced listings. West Los Angeles homeowner you have decided to sale your home. Expert local Realtor® has given you the approximate value of your home. Value is
based on recent sales in your area within .50 to .75 mile radius of your home within last 6 months. Preferably sales within last 3 months. Considered are similar conditions, living space, bedrooms and bathrooms. Condition cannot be overlooked is your home a fixer, well kept standard or renovated? Fixer value is less than a home that has been totally renovated. You have reviewed all information given by the Realtors®. You have decided to list with the Realtors® that has given you the Highest asking price.That is the price you want but overpriced. The Realtors® appeases you to get the listing. Agent hopes this overpriced listing will be reduced during the listing period. This price is not based on current values in your area. Price is agents incentive to obtain the listing. Viola, your home is overpriced. Home Sellers Pitfalls of Overpriced Listings.
Home Sellers Pitfalls of Overpriced Listings.
Pitfalls of overpricing your home is that buyers and agents will bypass it. Why because of the unrealistic price tag. 2015 had seen a scarcity of homes on the market. Fall 2016 housing inventory has slightly increased. Inflated priced homes are just sitting on the market. Conversely, as versus to home going over asking seeing listing price reductions.
Life of an overpriced listing. When the home is first listed there maybe a flurry of activity but it will die down. Buyers are not willing to pay for a overpriced home. There maybe similar homes on the market at a realistic price. In today’s market there may not be homes currently on the market. Buyers willing to sit on the fence. Waiting for new listings realistically priced to come on market. If your home is overpriced the longer the home sits on the market the less desirable your home becomes. There are one of two routes the seller can take. Leaving the home on the market with the hope and wish that the market will catch up to their desired price. Or you can reduce the asking price. Pitfall either way you have loss the initial activity and appeal that comes along with initially listing your home. Overpriced listings tend to sale for less than homes that were placed on market at market value.
Consider the Lender’s Appraisal
There is a scarcity of homes on the market and you receive an offer on your home. The offer is at the price listed. Unless the buyer is paying cash the prospective buyer will have to obtain a mortgage. Part of the process in obtaining a mortgage is the appraisal. The appraisal states the value of the home. Homes priced higher than current home values in the area? That home will appraise at a lesser value. There are options seller will lower price to appraised value. Or buyer pays cash compensating for difference. Example based on 20% down payment:
- Sales price $800,000.00.
- Buyers down payment 20% = $160,000.00.
- Home appraised $750,000.00.
- Lenders loan to value $600,000.00. Buyers down payment has to be $200,000.00. In most cases buyers are not willing to pay above the lenders appraised value.
Second example the seller will have to the lower price to the appraised value or loose the sale.This puts the seller back into market values. Initially, listing your home at current market values saves a lot of time and headaches.Home Sellers Pitfalls of Overpriced Listings.
Take Your Agent’s Advice
Home Sellers Pitfalls of Overpriced Listings. Sellers have a number in mind when it comes to selling their home That is GREAT. Agent will sit down with you giving data on the current market. Real estate agent will give approximate value of your home. That written data should be sales in immediate area within last 6 months. Sellers do not dismiss valid real estate statistical information. Sellers have to be objective not subjective. Real estate agents are the professionals. The higher the home price, the more money an agent makes. An honest professional agent will tell you the truth. Truth based on market trends and sells in area. An agent telling you your home is worth less is not putting more money in their pocket. The agent is just doing their job correctly. The agent that gives overpriced value is more than likely selling you, not your home. Which is exactly what you don’t want. Call a professional, Gail Mercedes Cole (310) 853-9933. Find out what your home is worth.
Information deemed reliable but not guaranteed.