When it’s a seller’s market and home sales are rising, it’s tempting to price your home even higher than nearby homes that recently sold.  So you tell your listing agent that you want to “test” the market to see if you can get even more for your home.

Sometimes, it’s appropriate to choose a list price higher than recent comparable sold homes, but that strategy seldom works unless the number of buyers willing to make competitive offers is greater than the number of available homes for sale.  In the Greater Lansing market that condition occurs in the Spring and early Summer months.  By the end of July the frenzy tends to slow down.  If you’re looking for a quick, hassle-free sale, you need to decide which is more important – getting more for your home or moving on to your new life somewhere else.

Let’s say your neighborhood’s highest, most recent home sale was $240,000, and your agent suggests a listing price of $245,000.  You want to test the market at $260,000 – which is $15,000 more than your agent recommends, and $20,000 higher than the latest comparable.

Your home hits the market at $260,000 and has tons of showings the first week. Your strategy is working, except that you don’t receive any offers.  By the second week, there are few to no showings.  Agents are reporting back to your listing agent that their buyers said your home “needs work,” or that they “found something more suited to their needs.”

After months of making mortgage payments, you reduce your asking price and your home sells for $245,000.  Meanwhile, you paid months of mortgage payments, taxes and overhead to gain $5000…the amount a reasonable buyer would pay for a home in your neighborhood.

Overpriced homes simply take longer to sell. If you’re tempted to “test the market”, remember that the market will test you.