Buyers often asked me how we get overpriced homes. As a buyer you will compare many homes, and you will conclude that some are clearly overpriced homes. Among several explanations, there’s an explanation you may not have thought about. It may be helpful for you as a buyer to understand how a home can be overpriced. Did you know that some agents bid for listings?
Overpriced Homes by Honest Mistake
A home can be overpriced because a seller is simply not realistic, or does not understand the current FMV of her home. Overpriced homes can also be the result of a listing agent over estimating how much a home can get in this market. Those are honest mistakes that sellers and their agents often make. Unfortunately, overpricing a listing can be a costly mistake resulting in a home sitting on the market for years before it sells at a much lower price. That can be a long and stressful ordeal for a homeowner. Buyers just pass by overpriced homes.
Overpriced Homes Intentionally
As a buyer, part of your challenge is to drill down to reasonably priced homes, not overpriced homes. I’ve seen agents do what I call, “bid for listings,” which means a homeowner simply lists with the agent who quotes the highest listing price. You can imagine how that turns out. [Read more about Bidding for Listings.] Now you know another reason we often see overpriced homes.
Last Updated on September 6, 2019 by Chuck Marunde
