8 Reasons Why You Shouldn't Test the Market with an Unrealistically High Listing Price
One of the main goals when selling a home is to achieve the best possible price. It might seem tempting to set a high listing price, hoping to land a big deal. But is it truly wise to test the market by pricing a property above its actual value?
While it might technically work in some cases, there are several reasons why this strategy isn't always the best choice.
1. No Offers, but Your Neighbors Get Them
It’s nice to be a good neighbor, but putting your own sale at risk just to help out a neighbor by setting a high price can complicate the process. Overpricing your home could lead buyers to choose more reasonably priced properties in the area instead. After viewing your overpriced home, many buyers will opt for lower-priced options nearby.
2. Loss of Credibility
Today's buyers are well-informed and have a clear understanding of what homes are worth in your neighborhood. Setting an unrealistically high price can cause buyers to dismiss your property entirely. Buyers will often lose interest if they feel misled by the asking price.
3. Not Everyone Enjoys Price Negotiating
A common mistake sellers make is setting the price high to leave room for negotiations. But what happens if buyers reject your home right from the start because of the high price? Some buyers enjoy negotiating, but serious buyers are more likely to respect a home priced fairly based on its real market value.
4. Wrong Advice from Agents
Some agents might agree to any listing price just to get your property listed on websites or platforms. These so-called "agents" often suggest unrealistically high prices just to maintain status. Gianna Hoffmann from Hoffmann Real Estate in Barcelona explains that a professional agent helps sellers set realistic expectations in order to sell the house at a fair price.
5. Valuable Time Is Wasted
In the first 30 days on the market, your home is fresh and draws the attention of buyers. Hoffmann Real Estate recommends setting the right price within the first three weeks to attract multiple offers. A high price can waste this crucial time, delaying the sale.
6. Your Home Becomes "Stale"
If your home stays on the market too long, potential buyers will start wondering what’s wrong with it. Realtors often refer to these homes as "stale" listings. Buyers may wait for a price reduction, which can further delay the sale. This could lead to a larger price drop at the end. We refer to our article: Why overpricing your property can backfire when selling.
7. Buyers Can't Find Your Home Online
Most buyers filter their search results by price. If your home is slightly above its optimal market value, it may not show up in relevant search results. A fair price ensures that your property remains visible to prospective buyers.
8. Hard to Justify the Home's Value
For buyers who require a mortgage, a market appraisal or valuation is essential. If your home is priced above its true market value with no comparable sales in the area, the appraisal could fail. Hoffmann Real Estate recommends increasing the value of your home through targeted renovations and improvements to achieve the desired price.
