Why? Check out my handy-dandy pricing pyramid here. Selling your home is a numbers game and you want as many people as possible to see your home. If you price your home right at market value, 60% of available buyers will consider your home. If you price it just 10% above market value, you lose half of potential buyers and only 30% will look at it. If you get to 15% above market value, only 10% of available buyers will see your home at all!
You get the most exposure your first week on the market when you are the bright, shiny, new thing for people to check out. After that, you’re lumped in with every other house. Should your price be off during the first week, it is difficult to bounce back from that. The longer your house is on the market (and it WILL stay on the market if it’s over priced), the more potential buyers assume there is something wrong with your house. As you end up dropping your price, some buyers assume there is fault in the house which is why the price has gone down (losing you more potential buyers).
Some sellers mistakenly assume they can overprice their home and then negotiate their price down with a buyer. While that might happen sometimes, what typically happens is that your overpriced home is compared with roomier, nicer, newer homes that are priced correctly and therefore your home is ignored. After all, if you could get a 4 bedroom new home for the same price as a 3 bedroom 20 year old home in the same neighborhood, would you even consider the latter?
Figuring out the correct market value for your home is both an art and a science. If you want to know how to figure out that sweet spot on your home, feel free to contact me and I can show you my time-proven process!