Important Information For Sellers – Don’t Overprice Your Home!

DSC_0071In Naples Florida our market is improving steadily, inventory is down and buyers are anxious to get into the market and purchase the home of their dreams.  However, there is something that could slow down the momentum of the current market.  If sellers are listing their properties higher than current market value because they are victims of the over zealous media, the current momentum can easily be lost.  In Naples home prices are increased over the last twelve months and it is enticing for sellers, who have waited for the market to improve, to overprice their home and hope for the best.  Unfortunately, interest rates have also increased along with home prices.

What Does The Higher Interest Rates Mean To Buyers?

The current higher interest rates mean that a buyer has to pay more money for their dream house and may not be able to afford the home they could just a month ago.

Let’s consider this example:  A couple have agreed their budget for a mortgage payment is $1000 per month.  At today’s interest rate of 4.5% they can afford a $200,000 mortgage but if the rate increases to 5% they can only afford a $190,000 mortgage in order to stay within their budget.  If a seller increases the price of their home by $10,000 expecting the market to meet their price, there is no chance for this couple to buy the overpriced home and stay within their budget.  That seller has lost a potential buyer.

What Has Happened To Asking Prices?

Trulia recently reported that asking prices have jumped dramatically and the increase is accelerating:

  • Year Over Year prices jumped 10.7%
  • Quarter over Quarter prices jumped 4.1%
  • Month over Month prices prices jumped 1.5%

Remember, this is not the selling price of homes but the price the seller is asking for the home.

What Is The Impact Of These Home Buying Statistics?

If you are a seller who has overpriced their home, your chances of selling decrease with each thousand dollars you ask over market value.  It is not only that the buyer has to qualify to purchase your home, your home will be appraised to make sure that the buyer is paying a fair price.  If you have overpriced your home, the appraisal will come in lower than the contract price and the buyer will not be able to buy your home even if they qualify.  It is exciting to hear that our market is increasing in value, and it is, but the increase is slow and steady.  Don’t listen to current headlines on the TV or newspaper, call me at 239-601-3174 so we can consider the current market and price your home to sell quickly.  You will be looking for a great deal also, when you move up to your next home, why should your buyer be any different?

Remember, it is always toasty in Naples and you deserve your piece of Naples Florida sunshine!

 

 

 

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