Are You Overestimating Your Home’s Value?

Selling

77% of home sellers think their homes are worth more than the Agent’s recommended selling price.

A recent study published in the Journal of Housing Economics and quoted on RISMedia.com, found that homeowners overestimate the value of their property by an average of 8%.

Overestimating the price of a home can force a homeowner into a kneejerk reaction to lower the price when offers do not come in, often lowering the price below fair market value.

Of course, it’s human nature to think optimistically about your home’s value. Emotional attachments can fog people’s perceptions about their home’s worth.

Homeowners are also naive about the impact of upgrades on the value of their property. In many cases, you may get back only a small percentage of what you put into home enhancements. And many improvements don’t come close to paying off what they cost, especially if they’re not in line with the neighborhood comps.

Recently, Crystal and I have been on a few listing appointments where the seller(s) expected an unrealistic sale price.  As a result, the seller(s) chose to list their home with other agents at an “elevated” price. As of this writing, these homes were still on the market growing stale. It is our experience, when a home sits “active” on the market for an extended period of time, the house either becomes stigmatized and /or receives lower offers.