Q&A: Can I list my home higher than fair market value?
Can I list my home for higher than fair market value to leave room for negotiation?
This is not advisable. When a home is first listed on the market, it gets its most activity in the first few weeks. If the home is overpriced, it can do more harm than good for several reasons.
First, comparable homes that are correctly priced are more likely to be chosen first by potential buyers. If a buyer has to choose between two homes that are fairly similar, they will most likely put an offer on the home that is most reasonably priced and may not even consider placing an offer on the overpriced home.
Second, an overpriced home will compete with homes in a higher price range that are likely more superior in quality, size, age, location, etc. Buyers looking for that higher quality may not even look at the overpriced home because it doesn’t fit their criteria.
Third, most agents are respectful of their buyers’ budget. If the home is priced out of their buyers price range, they may not likely inform their buyer of the home.
Lastly, overpriced homes tend to sit on the market for a longer time than usual. In the end, buyers will end up giving a low ball offer because they will think the seller is desperate to sell or that something is wrong with the house.