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You want to identify as many interested buyers as possible, and the largest pool of buyers exists when a property is priced competitively. A price above market value reduces the number of buyers who qualify for the property and can alienate those who would consider it.
An overpriced home can reduce early buyer interest known as "peak selling activity." You may miss out on an early sale and not be able to regain any momentum. In fact, you may have to drop the price later on to below market value to compete with new well-priced properties.
Finally, keep in mind that financing for an over-priced home may be difficult to obtain for some buyers. Remember there is another party involved in the transaction, the lender. The lender also must agree to the price. Lenders often use an independent fee appraiser to determine the market value of the home. If the appraiser sees that the sales price is above market value, the property will not qualify for the loan and the buyer may not be able to complete the purchase.
© 2007 Blue Edge Realty.
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