As many of you know, we bought a river house on Moran Creek in the Northern Neck in the Fall of 2021. The home came with a boat lift, so the obvious next step was to find the perfect boat to go with our new river house.
Flipping a House for Boat Cash
In our case, we decided to flip a different property to generate the necessary funds for a boat purchase. We purchased a fixer upper in the West End and diligently renovated it from February 2022 to June 2022. We pulled permits, got a tax abatement, and really made sure we did it right. The renovation went relatively according to plan and we listed in mid-June 2022 with dreams of sunset cruises to come on the Corrotoman River.
However, we made a major mistake that I regularly warn sellers not to do. We didn’t take our own advice and significantly overpriced the home at $425,000, the highest comparable in the neighborhood at the time. We also listed in mid-June, right when interest rates took their first hike and buyers were cautious for the first time in several years. It sat on the market for about two months with several price reductions and continued to sit on the market priced at $394,500 with little to no activity. We put our boat ownership dreams on hold and rented the property to a nice family that needed a temporary place to stay between home purchases.
Take Two
Fast forward to March 2023. We listed the property at the correct market value at that time for $374,950 and buyers have grown used to the 6%+ interest rates and were hitting the streets again for the Spring market. In that first weekend, we ended up with 35+ showings and seven offers to choose from. This month, the property closed for just over $400,000. So… how did that happen?
Overpricing Discourages Buyers from Even Looking
Overpricing a home can have several negative consequences. First, it can discourage potential buyers from even considering the property. If a buyer sees that a home is significantly overpriced compared to similar properties in the area, they may decide to look elsewhere rather than waste their time and energy considering a property that is out of their price range (especially when bidding wars drive prices up even higher).
The Longer it Sits, the Less Traffic it Gets (Usually)
Additionally, those negative consequences have a domino effect. If the home stays on the market for an extended period of time, it can become stigmatized and perceived as undesirable by potential buyers. This can lead to even less traffic and can result in the seller having to lower the price significantly in order to even get buyers in the door.
Be Realistic and Define Your Strategy
It’s important to remember that when it comes to real estate, pricing is everything. Pricing a property too high can have significant consequences and can lead to missed opportunities for both the seller and potential buyers. It’s important to work with a knowledgeable real estate agent who can help you price your property appropriately and avoid these negative consequences. Even if that agent learned that lesson the hard way.
We’ve made mistakes, however we were able to recover and help our clients avoid making that same mistake on the sale of their home. Stay tuned for the status of any sunset cruises to come!
Shameless Plug: Be Our Guest at The Pearly Oyster
Looking for a fun, relaxing, kid-friendly riverfront getaway? Our river house dubbed “The Pearly Oyster” is ready for guests on both Airbnb and VRBO. We are Superhosts with 80+ 5-star reviews and we’d love for you to stay with us!