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PITFALLS OF OVERPRICING |
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Minimizes Offers |
An overpriced house discourages
prospective buyers from making offers
since the difference between the asking
price and the market price is
substantial |
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Declining Salesperson Enthusiasm and
Response |
Salespeople lose interest in houses that
are overpriced. They do not spend
as much time showing the house as they
would if it was priced correctly.. |
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Less
Qualified Buyer Exposure |
Overpriced houses fail to attract
qualified buyers, or attract "wrong"
buyers. |
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Decline in Showings |
Salespeople avoid showing overpriced
houses in order not to lose credibility
with their buyers. |
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Loses Prospects
from Signs |
Prospects who learn about the house from
signs or flyers placed in boxes in front
get turned off if the house is
overpriced. |
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Limits
Financing |
Financial institutions and mortgage
companies finance only a percentage of
the market value of the house. If
the house if overpriced, they will
usually finance a lower percent of the
sales price, thus reducing the available
financing. |
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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. |
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Less
for the Seller |
Eventually market interest in the
overpriced property completely declines.
When this happened the sellers become
desperate and would sell at any price.
In the meantime they must bear the
maintenance and holding costs. The
net result is that the sellers get much
less than what they could have if the
house was correctly priced in the first
place. |
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