Why Overpricing is a Fail
Listing agents who are part-time hobbyists and have only worked in an appreciating market are learning some tough lessons right now. Unfortunately, their clients are suffering right along with them.
Prices in our market have remained relatively flat in the last year. You can read the details in Justin’s excellent summary of the 2025 Park City real estate statistics. Yet, in spite of the data, we are seeing sellers who purchased homes in the last 12-18 months attempt to resell them at 10% or more than what they paid.
When we represent buyers, we always ask the listing agent how they came up with the list price if it seems irrationally high. You wouldn’t believe the answers we get:
“They need $5m because of the cost of the home they want to buy.”
“They spent $25,000 to fix a roof that was leaking.”
“They purchased the home for $1.5m and they don’t want to lose money.”
Unfortunately, none of the above answers makes the property worth more. In fact, when overpricing a listing, the data shows the seller will actually receive LESS than they would have if the home was priced at market value to begin with. A properly priced property will sell at 97% of the list price with 30 days on the market, while an improperly priced home will languish on the market for 150 days and sell for 88% of the original price.
Overpriced Homes Receive Fewer Offers & Lose In The Long Run
The highest number of showings tends to occur when a property first hits the market. Buyers who have been waiting for the right home will immediately schedule showings and write offers.
A few weeks ago, I wrote an offer on a home that was almost 20% overpriced. The seller did not even submit a counter-offer. Yesterday, I received a call from the listing agent that the seller was dropping the price 5% and would likely accept an offer at 10% below the original list price. I told her that when the seller is willing to sell at market value, she should call me.
In the meantime, we are actively trying to find our buyer another home, and when the seller decides to get realistic, it may be too late. Either my buyer will find something else, or he may not be willing to pay the price we originally offered when the property had just hit the market and he was excited about it.
When a home sits on the market with no offers, buyers immediately wonder if something is wrong with it, or they smell blood and make lower offers than they would have if the home were priced right from the start. In addition, the seller bears the carrying costs.
What’s the lesson?
Work with an experienced listing agent who has the skills to price your home properly and tell you the truth. Otherwise, you will end up with less money or you will still own your home 6 months after the hassle of leaving for showings and open houses.