The Problems With Over-Pricing
One of the biggest misconceptions when listing your home, is that over pricing your your listing will result in a higher sale price. Here are 5 reasons why this is not only true, but will actually result in a lower sale price.
The Law of Supply and Demand states that prices are determined by the relationship between supply and demand. Which means that if price is too high, demand will fall.
Buyers are more informed than ever before. Until recently, only Realtors had access to sold prices. Today buyers have access to historic sales data and have a better understanding of current value.
Buyers today look at homes more logically than emotionally. Although, buying is a very emotional process, however, when it requires such an enourmous investment, Buyers tend to take a more logical approach, looking at prices.
Buyers see buying a home as an investment. Buyers today are cautious about over paying for a home and will likely overlook properties that are obviously overpriced.
Buyers see properties that have been listed for a longer period of time as unwanted or problematic. With Buyers accustomed to properties listed at good value flying off the market, they see properties that are listed for a long period of time of not good value. Even if the property is priced well, they’ll assume that something must be wrong with the property and will decide to skip over it.
In the GTA, where demand for homes are high and the supply is relatively low, in most cases, Sellers will benefit more from listing their home at a lower price than a higher price. On an affordability standpoint, the lower the price is the more people can afford it, and the more people who can afford it, the more demand for the property. If well marketed and handled by an experienced agent, the more demand, the more showings, and the more showings, the more offers. The more offers, well the more money in your pocket.