Why overpricing your home could be a costly mistake

Listing your house for a price that’s above its market value is rarely a good idea. Here are three ways overpricing your home can backfire.

1. It scares off potential buyers.
Many buyers will never see your home if your price is too high. Real estate agents won’t bother bringing clients to see your house if they think they have no chance of selling it, and your property won’t show up in online searches if the price is outside the desired range of most buyers.

2. The listing stays up for too long.
The longer a house stays on the market, the less likely it is to sell for the original price. Once a listing has been up for a couple months, buyers start to suspect something is wrong with the property. Even if you lower the price, it may be too late to attract interest, and you could end up getting less than the home’s market value.

3. Buyers may have trouble financing the purchase.
Even if you do find interested buyers, they may not get the loan they need for the mortgage if the appraisal shows your home is worth less than the selling price. Under these circumstances, the buyers may not be able to go through with the sale.

Before putting your house on the market, have your agent do a comparative market analysis of your property and use the results as a basis for your asking price.