Real estate is hot right now in Philly, but even if you are ready to put your house on the market, you may want to think twice before you jack up the price. Neighborhoods such as Northern Liberties, Fishtown, and Cedar Park are all selling like hotcakes, and you want to position yourself wisely to benefit from this booming market. Even if you are tempted to list your home higher than your neighborhood comps, you should heed the advice of Mr. Philly Real Estate and resist that urge. Here are a few of the dangers of overpricing your home in a seller’s market.
Size up the Competition
A good rule of thumb for your list price is to know competitive prices for comparable houses. If you price your house significantly higher than the competition, you could be sending up a red flag to potential buyers. They may question the price or rule out your house completely, leaving you with fewer interested parties. By pricing your home at a more competitive level you’ll drive up potential buyer traffic and have a higher likely hood of maximizing your homes value.
Price to Move
You don’t want to give your house away, but if you are so focused on your return on investment, you may overprice your home. A month or two later, you may have to lower the price because it has been sitting on the market. A stale listing may be overlooked by buyers who may offer you below value because they think they can get a deal. You don’t want to own a stagnant house in a hot market.
Setting Your Sights Too High
Another factor to consider is the appraisal. If your appraisal comes in lower than your asking price, you may have to adjust your price point because potential buyers can’t secure a mortgage. If that happens, your home’s large price tag can be a moot point if no one can find financing to purchase it.
A Smarter Strategy
Consider a different scenario. Suppose you follow your real estate agent’s advice, think objectively, make a good first impression, and price your home competitively. The benefits of a fair price include:
- More frequent showings
- The potential of multiple bids which can drive up your sale price
- Higher profit with a faster sale
- A win-win situation for both seller and buyer
If you have already listed your house over its value, you may opt to take it off the market and relist a few months later at a more competitive price. Your home can seem like a brand-new listing and garner excitement from buyers.
Before you decide on the asking price for your home, get in touch with Ian Perler, Mr. Philly Real Estate to learn more about getting your house ready to sell. A little prep work before you put your house on the market can mean a difference in your sale price.