Overpricing a Home

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Real Estate

Recently at our office we discussed the case wherein an agent will often overprice a home. A good agent will know the comps forward and backward. If another agent approaches you with a price that is significantly above the market price of homes with similar amenities that’s a red flag. It’s called "BUYING A LISTING."

Say a seller interviews Agent A who presents the comps for their home and they are very similar. Next Agent B it was discussed shows up with a listing agreement reflecting a price $50k+ higher than Agent A.

What do you think happened in this scenario? Real life situation. The home should’ve SOLD in one-two weeks with accurate pricing. Last weeks class followed up. 70+ days later the home was still sitting on the market at a price now $40k below where it started and still higher than the price Agent A presented as their suggested go to list price. Fast forward to 100+ days on market and the house is finally under contract. It closed for $74,900 less than the list price and $20k less than Agent A recommended. In the end the seller got less money than he should have had the house been priced appropriately from the get go. 

Be aware that if someone gives you a price that is pie in the sky unrealistic, to call them out on it and ask what comps substantiate that price point. An overpriced home will linger on the market, a stigma gets attached to it, not to mention the costs of maintaining possibly multiple homes. After a while buyers will note you are likely desperate and offer you less than what the home is actually worth. This is a lose, lose scenario.

Study the comps with your agent and select the one that you believe is in integrity as opposed to the agent who is over promising and giving you a price that the market will not support.