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Over Pricing Toronto Real Estate

It’s natural for the desire to net out as much out of your home when you’re selling.  It’s even understandable to bump the price up a few thousand dollars knowing you only need one buyer to fall in love with your home for it to sell.  This is actually a very dangerous strategy that could end up costing you more than if the house was priced properly from the outset.

There is a long list of problems with overpricing; I’ll touch on a few.

Stale Listing

Overpriced listings are more difficult to sell and run the risk of sitting on the market for a longer period of time.  It’s not uncommon for buyer’s to ask how many days the home has been on the market as this will be used for negotiating leverage.

Wrong Price Range

Let’s suppose for a minute that your house has a market value $500,000, but as a seller you insist on an asking price of $560,000.  Legitimate buyers with a budget of $450,000 – $500,000 will likely expand there search slightly above their limit.  Your home which should have been on their radar would not have even shown up on their search.  You’ve now effectively priced yourself out of the market.

“Comparison Home”

A comparison home goes hand-in-hand with being in the wrong price range.  Going back to the scenario above, the $500,000 home is in competition with houses that are genuinely worth $560,000.  As a result, when direct comparisons are made, the overpriced home is almost always found lacking.  It’s considered a comparison home because its inability to compete makes properly priced properties in the $560,000 range look like a real bargain.

It’s important to get a realtor that understands these very real dangers.  Properly pricing your home can be the safest way to realize the largest return on your investment as it creates the most competition.

If you’re curious about the value of your home, get in contact with me for a free home evaluation.