Have you seen a house sitting on the market and wondered why
it hasn’t sold? Even when most houses are selling quickly, some remain on the
market. When a house doesn’t sell, it’s usually because it’s priced higher than
the market will bear. Here are some
reasons why sellers overprice their homes and options you have if you want to
buy one of them.
Sellers With Unreasonable Expectations
Some sellers who overprice their homes have data on
comparable sales but don’t accept the data as a good guide when it comes to
their home. They may be overly optimistic about the value buyers place on small
improvements they’ve made. Or they may believe that minor differences between
their home and some of the comparable sales have a larger effect on value than
is really the case.
Selling Soon After Purchasing
Homeowners who unexpectedly need to sell within a year or
two after buying may also be tempted to overprice. In our area, when someone
sells soon after buying, any rise in prices since their purchase isn’t likely
to make up for the costs incurred in buying and selling, and those sellers tend
to lose money. The impulse to overprice in this situation can be strong, with
some homes remaining on the market for an extended period before prices are
reduced and the homes are sold.
Unmotivated Sellers
Some homeowners decide to list their home intending to sell only
if they receive a high offer. These are some of the least motivated sellers,
and many price their homes too high. These homes tend to stay on the market and
often do not sell.
What Can Buyers Do?
If you’ve seen a home you want to buy but have determined it
is overpriced, one option is to wait and see whether the price comes down. When
sellers reduce their price, it lessens the gulf between the asking price and a
realistic selling price and increases the chance you can negotiate a price acceptable
to you. This may be a good strategy if you aren’t under pressure to buy a home
quickly.
Another option is to make an offer without waiting, even
though the asking price may be far above what you would pay. If you choose this
option, bear in mind that the chances may be low that the sellers will come
down to a price acceptable to you when the price gap is large. Unless it is the
home of your dreams, you may want to avoid the frustration of dealing with
unrealistic sellers, continuing your search instead and making an offer on a
more competitively priced home.
Read more of
Annette’s real estate articles
for the latest real estate advice. What real estate topics would you like to
see covered? Send your ideas to annette@preferredhomes.com
If you’re planning to buy or sell a home, contact Annette
Nelson at (610) 247-7892 or annette@preferredhomes.com
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Copyright © 2020 by Annette Nelson. All Rights Reserved.
