The High Cost of Overpricing: A Pricing Strategy Guide for Lamorinda Sellers

Hi there! If you're considering selling your home in Lamorinda, which includes Lafayette, Moraga, and Orinda, pricing it right from the start is crucial. Let's talk about the significant impacts of overpricing and how to determine the best price for your property.

Why Overpricing Hurts Sellers

Overpricing your home can have serious consequences. Homes that start with a higher price often take longer to sell and end up selling for less than those priced correctly from the beginning. Here's why:

1. Losing Initial Interest: The first few weeks on the market are critical. This is when your home gets the most attention from buyers and brokers. If the price is too high, you might miss out on serious buyers who move on to other listings.

2. Extended Time on Market: Homes priced above their market value often sit on the market longer. As time passes, buyers start to wonder why the property hasn’t sold, leading to doubts about its condition or value.

3. Lack of Competitive Bidding: Correctly priced homes can create a sense of urgency and even lead to multiple offers, driving up the sale price. Overpriced homes, however, rarely attract multiple bids, often resulting in a single offer at best.
   

Updated Market Data: A Clear Picture from the East Bay

Patrick Carlisle, Compass Chief Market Analyst, recently published a pricing study covering over 14,000 sales in Alameda and Contra Costa Counties. Here's what the numbers show:

Homes that sold without price reductions:

• Sold for 104.5% of original list price

• Spent 17 days on market before going into contract

Homes that required price reductions:

• Sold for 93% of original list price

• Took 58 days to sell

• Averaged 11% less in sales price and $/sqft compared to homes priced correctly

These numbers aren’t just stats—they’re real consequences in dollars and time. If your home is worth $2M, an 11% reduction could mean over $200,000 in lost equity simply due to pricing missteps.

Overpricing costs more than you think. Homes that required price cuts sold for 7% less, took 6 weeks longer, and lost 11% in value per square foot. Pricing right the first time matters.

The Real Value of Your Home

The fair market value of your home is determined by what a qualified buyer is willing to pay after the property has been properly marketed. Neither sellers nor agents set this value; the market does. The best way to estimate your home’s current market value is through a comprehensive comparative market analysis (CMA).

Sample Side-by-Side Comparative Market Analysis (CMA)

A side-by-side CMA compares recent sales, active listings, and market conditions to pinpoint your home’s fair market value. It’s the foundation of a smart pricing strategy—and why guessing isn’t a winning plan.

Tips for Effective Pricing

1. Start with the Right Price: Avoid the temptation to test the market with a high price. Instead, set a realistic price based on comparable sales and current market conditions.

2. Prepare Your Home: Make sure your home is in its best possible condition. First impressions matter, and a well-presented home can justify a strong asking price.

3. Market Effectively: Use a comprehensive marketing plan to ensure your home reaches the right audience. The more buyers you attract, the better your chances of getting the best price.

4. Choose the Right Agent: Work with a real estate agent who understands the Lamorinda market, can provide a detailed CMA, and knows how to negotiate effectively on your behalf.

Buyer activity peaks early. A competitive pricing strategy attracts up to 95% of buyers, while overpricing can cut that number down to just 20% or less. Don’t miss your window of opportunity.

More from the Report: The Compass 3-Phased Strategy

Overpricing often stems from a fear of "leaving money on the table"—but ironically, it has the opposite effect. The report suggests:

“Overpricing usually stigmatizes a property and reduces the eventual sale price to less than it would have been with more realistic pricing.”— House Selling for Dummies

If you're unsure about pricing, ask about Compass’s 3-Phased Marketing Strategy, which allows you to test market interest without risking a “still unsold” label. It gives sellers time to adjust strategy based on actual buyer response—while keeping your home looking fresh.

Potential Opportunities for Buyers

For buyers, homes that have been on the market for a while or have seen price reductions can present great opportunities. These properties often face less competition, allowing buyers to negotiate more favorable terms.

But note: sellers who price right from the start often attract multiple offers and higher final sales prices—so don’t wait too long if a well-priced home hits the market.

Key Takeaways

• Don’t Overprice: Overpricing can lead to your home selling for less than if it were priced correctly from the start.

• Act Fast: If your home isn’t attracting offers, consider a price adjustment sooner rather than later.

• Trust the Market: Let the market guide you in setting a fair price for your home.

• The Margin of Error is Expensive: Even a small % drop due to price cuts can mean tens or hundreds of thousands in lost proceeds.

Call to Action

I'd be happy to offer you a complementary consultation to help you understand how much your house is worth today in Lamorinda. Don’t rely on Zillow alone; get a professional evaluation. We can also discuss strategies to maximize the value of your home. Contact me, Judy Sin, your local Lamorinda real estate expert, to schedule your consultation. Let's make sure you get the best possible price for your home!