The Top Mistake Sellers Are Making: Overpricing Their Homes

In today’s competitive real estate market, one of the most critical challenges sellers face is setting the right price for their homes. A misstep many are making is overpricing, which can lead to a property languishing on the market without attracting serious offers. This situation often forces homeowners to reduce their asking price, a strategy that can have long-term repercussions.

Recent data from Realtor.com reveals a growing trend of price reductions, as more homeowners come to terms with the reality of an overpriced listing.

The Importance of Market Awareness

One of the most significant factors in setting an appropriate price is understanding the current market conditions. The real estate landscape has shifted considerably since the pandemic, and relying on outdated information can lead to inflated expectations. The key to avoiding this pitfall is aligning your asking price with today’s market realities.

The real estate expert you rely on plays an essential role in this process. With 50+ years of experience in market trends, we have the expertise to create a pricing strategy that reflects the current state of the market, rather than what it was months or years ago. Also vital is having local, Lake Tahoe-specific expertise. We have seen a recent influx of out-of-town agents come in and significantly under or over-price properties, obviously doing a huge disservice to their sellers. 

The Pitfall of Emotion-Based Pricing

Another common error is basing the asking price on what you hope to gain from the sale, rather than on the property’s actual market value. It’s easy to look at other homes in your neighborhood and assume yours is worth just as much. However, without considering critical differences—such as updates, conditions, and unique features like water access, views, or a finished basement—this approach is often misleading. 

As Bankrate aptly puts it:

"How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand the fair market value in your area, how much your house is worth, and how much you might reasonably expect to get for it in the current market."

Often times agents use an automated system to create comparative market analysis (CMA). It is especially crucial here at the lake to have an expert conduct an extensive CMA based on our unique dynamics a few being our limited inventory and availability of new construction, accessibility, land use restrictions, and mountain and lake views to ensure your home is priced accurately, based on comparable properties in the area.

The Risk of Overpricing to Allow for Negotiation

Some sellers intentionally price their homes significantly higher than market value to leave room for negotiation, but this strategy can backfire. A price that seems too high can deter potential buyers, who may not even consider your property. By the time you reduce the price, the initial excitement and activity that new listings generate have already faded, potentially leading to a prolonged time on the market.

As U.S. News Real Estate explains:

"You want to sell your house for top dollar, but be realistic about the value of the property and how buyers will see it. If you've overpriced your home, chances are you'll eventually need to lower the number, but the peak period of activity that a new listing experiences is already gone."

One of our greatest skills, again due to our extensive experience, is setting a price that not only attracts buyers but also encourages competitive offers, positioning your home for a successful sale. We bring an objective perspective, in-depth market knowledge, and a strategic approach to pricing, to ensure your home is positioned to sell quickly and for the best possible price. We are approaching what is historically the most active time of the year in real estate here at the lake. If you are considering selling and want to know your property’s value, let’s connect. We will get you the best value for your home!