How do you Know When Your Home is Overpriced?
The value of your home depends on a lot more factors than the price you paid for it. For one, the price buyers are willing to pay for it at any particular time may depend on prevailing economic conditions, mortgage rates, the season of the year and a host of other things affect the value of your house. Below are some indicators your home might be overpriced:
The price of other homes in the neighborhood is way lower than yours.
Looking from a buyer's perspective, they usually know what the general sale price is of houses in a particular location. When they notice yours is way over that, they may simply skip over yours and never even look at it because they see better deals nearby. If they are looking at several homes and yours is the smallest or worse shape than other homes they can get at the same price, you can see why your home might not make it on their list to see.
Few showings or no offers made since the listing.
In the Denver market, if you haven’t received any offers after about 3 or 4 weeks and no prospective buyers have come to view the property, there might be a couple of reasons why. Is your agent trying his best to promote your listing? Are other houses in your neighborhood moving? If both answers are yes, then it might be a likely fact that your home is overpriced.
Other homes in your area are selling, and yours is not.
There are different reasons why this may be so, are those houses newer? Are they larger or have better features? Do they have better or larger lot than yours? If they're very similar to yours and the other homes are sellingYou might be overpriced.
Real estate agents often state the listing period on the listing agreement. If the listing period expires without being sold, you might want to drop your price as it might be an indicator that your house is priced too high. It doesn't mean there are no buyers; it just means the buyers who came were not willing to offer that much.
Keep in mind if your home doesn't get an offer in the first month, everyone will try to offer under your list price. It's critical to get the price right in the beginning to prevent having to sell to bottom feeders.