- MINIMIZES OFFERS
An
overpriced house discourages prospective buyers from making offers since the
difference between the asking price and market price becomes substantial.
- AGENT ENTHUSIASM AND
RESPONSE
Agents lose interest in property that is overpriced. They do
not spend as much time showing the house as they would if it were priced right.
- QUALIFIED BUYER
EXPOSURE
Overpriced houses fail to attract qualified buyers, or attract
"wrong" buyers.
- DECLINE IN
SHOWINGS
Agents avoid showing overpriced houses in order not to lose
credibility with buyers.
- LOSES PROSPECTS FROM
SIGNS
Prospects who learn about the house from the sign get turned off
if it is overpriced. They do not pursue the matter to even see the house.
- LIMITS
FINANCING
Financial institutions and mortgage companies finance only a
percentage of the real value of the house. If the house is overpriced, they
usually will finance a lower percentage, thus reducing the available financing.
- WASTE OF ADVERTISING
DOLLARS
A house that is unrealistically priced fails to get normal
advertising response. This reduces the effectiveness of advertising and results
in the loss of advertising dollars.
- LESS FOR
SELLER
Eventually market interest in the overpriced property completely
declines. As this stage is reached, the seller becomes desperate and he begins
to feel he would sell at any price. In the meantime, he or she must bear
maintenance and holding costs. The net result is that the seller gets much less
than he could have if the house was correctly priced in the first place.
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