Is Your Listing Price Too High? 6 Ways to Know for Sure

It's no secret that real estate is hot these days. Prices are rising, inventory is low, and a whopping 70% of buyers are finding themselves in a bidding war.

While that obviously gives sellers the upper hand in most markets, it doesn't mean you can just name your price — at least not unreasonably.

Are you selling your house? Here are six signs your asking price might be too high.

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If it feels like your home is taking a while to sell, your price is more than likely to blame. Ask your agent what the average DOM (days on market) is for your area, and if your home has been listed longer than that, you may want to consider bumping your listing price down a bit.

Have your agent run a comparative analysis to see what other similar properties are going for, as well as how quickly they’re selling. You should aim to be on par with homes the same size, age, and condition as yours.

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Keep an eye on other listings in your neighborhood and, specifically, on your street. Have any gone from listed to sold since yours has been on the market? If so, it indicates two things: 1) Your area is in demand (that’s good), and 2) something is holding your property back. Taking a look at your pricing and the condition of your home might be a smart move.

If the showings are just rolling in, that’s a great sign. But if few offers are following those appointments, you definitely have a problem. It most likely means buyers don’t like what they see -- at least in relation to your price point.

Have your agent talk to the buyer agents who scheduled those showings. What held them back from making an offer? What didn’t they like? This could point you in the right direction.

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If you're getting offers that are significantly lower than what you're asking -- especially several of them -- that's a pretty good indication you've overpriced. Talk to your agent about dropping your price a bit or adding some furniture, appliances, or some other perk to your listing (i.e., give them more bang for their buck).

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Did you interview several agents before deciding who to list with? Were they all proposing around the same price, or did you go with the one who recommended the highest listing price? If it’s the latter, you can pretty much bet your price point is the problem.

Sometimes, agents can be a little overzealous in setting a listing price -- particularly in a hot market. (Remember, the higher the price, the more their commission is.) Tread carefully and make sure they show you sales comps to back up any number.

Finally, if you accepted an offer, and then the home failed to appraise for that amount, it's a clear-cut indication that your home is overpriced. If the buyer has an appraisal contingency in place, they can even back out of the deal because of it. You'll need to re-list the home (ideally at a lower price point) and start over when this happens.

Your best bet is to reprice or, if your agent thinks it's wise, only choose offers without appraisal contingencies in them. With these, the buyer is required to make up the difference between their offer and the appraised value out of pocket.

ALSO READ: What to Do If Your Home Appraisal Comes Back Low

Poor pricing can hold your listing back. Too many days on the market, repricing, and outlasting other nearby properties can send up alarm bells for buyers and have them wondering what's wrong with the home (only furthering the problem).

The best strategy is to price competitively from the start. So, make sure your initial listing price can be backed up by local comps and recent sales -- particularly of properties similar in size, age, and condition to yours.

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