“In today’s competitive housing market, many sellers are falling into a common trap: overpricing their homes. This costly mistake often results in properties lingering on the market without attracting offers. When a home sits unsold for too long, sellers are often forced to lower the asking price in an attempt to revive buyer interest.
According to data from Realtor.com, the number of homeowners recognizing this error and reducing their prices is steadily increasing (see graph below):”
What You Need to Know Before You Sell: Avoiding Common Pricing Mistakes
If you’re considering selling your home, it’s crucial to avoid costly pricing errors. The best way to ensure you’re on the right track is by partnering with a trusted real estate agent who can help you determine the optimal price. Here’s why this is so important:
Ignoring Current Market Conditions
To price your home accurately, you must understand the current market conditions. It’s a mistake to base your asking price on the trends from the pandemic era, as the market has significantly moderated since then. Aligning your price with today’s reality is essential for attracting serious buyers.
Real estate agents are experts at staying updated on market trends, and they use this knowledge to craft a pricing strategy that reflects the true value of your home.
Setting a Price Based on Desired Profit, Not Market Value
Another common misstep is pricing your home based on the profit you hope to make, rather than its actual market value. It’s easy to see other homes in your neighborhood selling for high prices and assume yours can do the same. However, you may overlook key differences in size, condition, and features—such as waterfront views or finished basements—that justify those higher prices.
Bankrate highlights the importance of this:
“How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth, and how much you might reasonably expect to get for it in the current market.”
An agent will conduct a comparative market analysis (CMA), ensuring your home is priced in line with truly comparable properties for an accurate valuation.
Overpricing to Allow Room for Negotiation
Some sellers believe in setting a high price to leave room for negotiation. However, this tactic often backfires. A price that appears too high can deter potential buyers from even considering your home. Instead of creating negotiation opportunities, you might be driving buyers away.
As U.S. News Real Estate explains:
“You want to sell your house for top dollar, but be realistic about the value of the property and how buyers will see it. If you’ve overpriced your home, chances are you’ll eventually need to lower the number, but the peak period of activity that a new listing experiences is already gone.”
A skilled agent will help you set a fair and attractive price, increasing the likelihood of multiple competitive offers.
Bottom Line
Overpricing your home can lead to significant setbacks. A knowledgeable real estate agent brings objectivity, deep market insight, and a strategic approach to pricing, helping you avoid these common pitfalls and achieve a successful sale.
