Sellers wonder – Did I underprice my home?
In my 10 years as a real estate agent, and I have never seen such a frenzied real estate market in Kansas City. There are far more buyers than there are homes for sale, and homes are selling within hours and receiving multiple offers. Often, the homes sell for over list price. For example, a nice home listed for $250,000, will likely sell for $260,000. However, just today I heard of a $515,000 home in Prairie Village that sold for $615,000 – ONE HUNDRED THOUSAND over list price. You may call that a success, but the seller will undoubtedly wonder if they underpriced their home and could have received more.
Ok, picture this scenario…
You are selling your home. You staged and prepared it to perfection, did your market research, and then decided on the perfect price – not too high, not too low. You go on the market, and what happens? You get 20 showings scheduled in one day, and receive five offers. They are all either at or over list price.
So what went wrong?
If that sounds like silly question, it should. The sellers should be patting themselves on the back and toasting their good fortune. We are in a sellers’ market, with the number of home buyers out-supplying the inventory of available homes for sale. The buyers in this market understand that in order to have a chance at securing a home, they may need to pay an amount above and beyond the home’s listed price. It’s a scary, stressful situation for buyers; and on the flip side, it’s a confusing time for sellers.
Did you underprice the home?
If you present a quality property at a fair price, it will attract a huge amount of interest. This low supply of properties for sale coupled with peak demand can drive up the price in a bidding war. This is AWESOME. Don’t second guess it, go with it.
The consequences of overpricing your home
In a market with rising prices such as this, there is a definite impulse to test your limit and push the upper limits of pricing. This is very risky, even in a seller’s market. If you overprice, you won’t get as many showing appointments. Most buyers, especially buyers with a real estate agent, are informed on property values and can recognize when a price is too high. They will be reluctant to overpay, they may not be able to secure the loan with an inflated value, and they certainly won’t want to owe more than the home is worth. When you overprice, it generally takes longer to sell, and you either sell at or below list price.
Image credit: This is a kitchen in a house I listed/staged/sold in Overland Park, which sold in the first week on the market. Photographer, Jennifer Wetzel.