How Much Does it Cost to Over Price a Home?
In such a strong seller’s market it can be tempting to over price your home and try to get tomorrows price today. But just as multiple offers can send a sales price sky high [see, “What Did that Home Sell For?!? How Multiple Offers Raise Prices Up in Portland”], over pricing a home can cost you a fortune.
I took a look at the last few months in an affluent area of NE Portland to see just how much seller’s had to settle for when they asked too much for their home. Keep in mind this is a neighborhood where the average sales price is $532,000.
I took a sample of homes that were on the market longer than 60 days before getting an offer.
From the original list price to the final sales price seller’s had to come down 11% and that equals $58,500 in this area.
I mentioned this to a long time investor and his comment was that the lower price was really just the market price. While this makes sense on first look the truth is that when homes are listed at market price they typically get 99% or more of the asking price. When you over price, even after an average price reduction of 6% the homes in this report still sold for 5% less than the lowered list price. That 5% haircut equals $26,600.
When you price your home in the market range you can expect 99-107% of ask price.
When overpriced you could be selling at 89-95% of ask price.
See my notes and report here.