Five Signs That Your Home Is Overpriced

ByABC News
November 25, 2002, 1:58 PM

N E W  Y O R K, Nov. 26 -- Home is where the heart is, and it's also where the debts, headaches and wealth can be. Small wonder, then, that selling a home is a loaded and emotional experience.

All too frequently, homesellers' opinions of their properties are clouded by sentimentality. Every parent thinks his or her children are extraordinarily gifted beings, and in a similar way, most families believe their homes are worth a great deal more than the average.

It's only natural couples remember the particular spot in the living room where their firstborn took his first step, or the outrageous bill they received after having the plumbing overhauled, and they assume it all should show up in the sales price. Regretfully, it doesn't work that way.

In a booming real estate market, in which fixer-uppers in up-and-coming neighborhoods receive multiple bids above the asking price, an overpriced home isn't a deterrent to buyers it simply insures the seller will make a nice profit. When the market declines, however, an irrationally priced property is a guarantee that the home will languish on the market longer than comparable properties.

In a down market, the risk of an overpriced home isn't simply that you won't get the asking price there is also a risk of turning off potential buyers and brokers, since an unreasonable price could stigmatize the property.

The first flurry of activity occurs in the first month a property hits the market. After a home sits on the market for six months or so, it could become a stale listing that gets filed in the junk drawer of forgotten and overlooked properties.

Is The Price Right?

Now that real estate markets around the country are showing signs of sputtering, it becomes even more important that a home is priced appropriately. In New York, one of the targeted "bubble" real estate markets, prices per square foot in the third quarter basically remained unchanged from the second quarter; and the price-per-room declined 2.9 percent, according to the Corcoran Group, a Manhattan-based real estate brokerage firm.