Over-Pricing a Home - A Hidden Danger of MLS Search

Most Sellers are familiar with the standard warnings about over-pricing a home. Long days on market, few if any showings, etc. But in the Digital Age, there’s a hidden danger of over-pricing that Sellers are not aware of: The dynamics of buyers using price ranges in MLS Searches.

Home buyers all search online and use parameters to refine their search. The most important and sometimes the ONLY criteria they use is a price range. Common ranges are $100K to $150K, $100K to $200K, etc., etc.-- we know this. But here’s where it can get interesting: If a Seller over-prices a home and it tips into a higher price range by just a little, the home will compete with far superior properties. And that's not good.

As an example, let's say that a realistic asking price for a particular 3/BR 2BA 1995 home is $285K. That puts it in a favored buyer MLS search range of $200K to $300K where it belongs and will compete nicely for buyer attention. BUT, the Seller wants to give it “wiggle room” (which, at the suggested $285K asking probably already has “wiggle room” built in)-- but Seller wants to list it for $305K. What could it hurt? In truth, a lot.

Now, it will fall in the $300K to $400K+ MLS price range where it ends up alongside other homes that are larger, newer, on larger lots, and will look “chintzy” by comparison. It doesn't measure up. More than likely it won't make the “cut” when buyers select homes to visit because, compared to the other homes, they perceive that it lacks value. It is not representative of homes in that price range.

So, pricing a home correctly isn’t only important in generalities. In the Digital Age where perception many times is truth, it’s vital.