Pitfalls of Overpricing

Here's a recent home sale story that'll SHAKE you to the core.

• We were interviewed by a seller who was interested in selling their home with us and they praised our processes and were very impressed with our track record.

• Not surprisingly, they wanted to interview another agent, and we were fine with that. Our clients almost always come back to us.

• After a week of hearing nothing, they finally let us know they decided to sell with someone else so we just moved on to help our other amazing clients...

• This is when the suspense starts to build up. On a weekend soon after that, their home came on the market at a much higher price than our market analysis suggested. 

• What’s interesting is that the same weekend we put another similar home on the market. Ours was bigger than theirs, yet it was listed for less. 

• What was the outcome? Our open houses were swarmed! We accepted an offer in only 5 days on the market and it was way over asking (over $2M) with no inspection or mortgage contingencies. 

• What happened to that other home?... It stayed on the market for weeks.

• One week it had a huge price drop of $101,000 and in another couple of weeks later it dropped another $148,000!

• After 57 days, they finally accepted an offer with an inspection contingency and will end up selling for almost $250,000 under the price they had it on the market for originally.

Needless to say, sadly, they left a lot of money on the table. And this isn’t even considering the weeks they spent stuck in transition with expenses from utilities, taxes, delays, fees, and being ultra stressed unable to move onto the next phase of their life.

Here is the moral of this story:

1️⃣ Use data driven processes to price your home before coming on market. Don't let your pride get in the way. That alone will cost you hundreds of thousands of dollars.

2️⃣ Use pricing strategies that have been tested repeatedly and that you know will have a high success rate. Experienced agents will have these, so pick the right one.

3️⃣ Beware of agents that try to convince you to use them by promising to sell your home for higher than its market value only because they want the satisfaction of saying they sold your home. We call this ‘Buying your listing’ or if they agree with the price you propose too quickly, without doing a market analysis for you, then that's a red flag and they will help make you lose a ton of money.

Ultimately, a good agent is not just one of the biggest bargains on this planet, but they will be worth their weight in gold. They will guide you to make the smartest decisions and prevent you from losing hundreds of thousands of dollars that you’ll never get back.