Inflated home values are in the eye of the beholder on clarkhoward.com

How do you think other people drive? The average person would say that others are terrible behind the wheel -- while they perceive themselves as great drivers.

The average homeowner has a similar psychology when it comes to home value. The belief is that "my home has gone up in value over the last year, but surrounding homes have not," according to a Zillow.com survey.

The real danger of this kind of thinking occurs when you go to sell your home. If you believe your own hype and overprice your home, you'll probably wind up getting less than if you priced it right upfront.

Here's why: When you first list your home, you get an influx of traffic from agents and investors. If you're overpriced, agents won't bring any clients back to show your home and no investor will buy it. You become a stale listing.

If you really want to sell your home quickly, try listing at a price that's "low aggressive" -- that is, low enough below what others are offering so that you look like a bargain.

Clark learned this lesson the hard way. Back in 1996, he and his wife overpriced a home they had for sale. It took them 14 months to get the house sold and they had to carry 2 mortgages during that entire time. They wound up really having to cut the price to entice agents to bring clients around.

What others are saying

Home Sales
Nice article and I couldn't agree more., however, this is a completely different market than it was in 1996. In 1996 Atlanta was putting it's best face forward because of the Olympics and the economy was robust and healthy. Everybody in Atlanta thought their house was worth a fortune because of all the Olympic exposure. This was purely greed on the part of the Seller. This is an apples and oranges comparison.

According to recent data, in all of 2007 in Gwinnett County we sold 15,324 homes for a Median Sales Price of $199,400. YTD in so far in 2008 we have only sold 5,744 homes at a Median Sales Price of $191,100. Therefore the data suggests that we have approximately 1/3 the number of Buyers than the previous year and the average Median Price of homes sold has dropped over $8K from last year.

To me that is a much stronger argument about pricing homes more aggressively than Clark's recollection of his home sale fiasco 12 years ago.
By Michelle D. @ 08/18/08 08:57:05 AMreport abuse
Home value
We had the exact same issue last year when trying to sell our home. We had only lived there 2 years and it's value went from 224k and appraised at 275k. I tried to sell it myself at that price and didn't get any takers. Our neighbor two house down put theirs on the market for 269 and sold it for 260 in about a month. This is right at the peak of the housing bubble. We got a Realtor and still listed it higher then she suggested for 249. She wanted to list it at 239 but couldn't come to grips with the fact prices were dropping that fast.

Long story short we took a serious loss because we saw our home as a better value then anything on the market. Our biggest mistake was purchasing a second home, using a bridge loan on the house that wouldn't sell because we figured it would fly off the market at 249. We were dead wrong. We ended up selling for /ready for this...... 219k then add in realtor fee's and the 6k bridge payoff and we cleared out our savings account to the tune of a 10k check to the lender when we sold. OUCH. thankfully with the bridge loan we were able to roll about 30k of equity into the new house.

Morale of the story is from now on I WILL listen to the real estate expert. tough lesson
By Rex @ 08/13/08 12:23:35 PMreport abuse
Driving
Clark I hate to bust your bubble but I'm a damn good driver. Yea I know that I sometimes run off the road and grandma complains but she also knows that I'm a pilot who can fly fix or rotary wing aircraft. After all I do have enought sense not to speed up when a deer is standing besides the roadway like some fool's, The deer just might not like standing there anymore and not have enough good sense to keep from jumping out at yah. Grandma is good at running 'em down. But she don't bring the meat home, after all that tenderision
By Grandpa Gene @ 08/13/08 08:25:51 AMreport abuse
Clark's Home in the N Ga Mountains
Pls pass on to Clark. Clark, just to let you know as my wife and I were going by you house in N Ga. last evening (August 11, 2008)around 7:30 PM, there was a large back bear in your front yard. I am sorry that we did not have a camera in the car to take his picture. There will be more!
By George Harbour @ 08/12/08 03:55:20 PMreport abuse

Home Sales

Nice article and I couldn't agree more., however, this is a completely different market than it was in 1996. In 1996 Atlanta was putting it's best face forward because of the Olympics and the economy was robust and healthy. Everybody in Atlanta thought their house was worth a fortune because of all the Olympic exposure. This was purely greed on the part of the Seller. This is an apples and oranges comparison.

According to recent data, in all of 2007 in Gwinnett County we sold 15,324 homes for a Median Sales Price of $199,400. YTD in so far in 2008 we have only sold 5,744 homes at a Median Sales Price of $191,100. Therefore the data suggests that we have approximately 1/3 the number of Buyers than the previous year and the average Median Price of homes sold has dropped over $8K from last year.

To me that is a much stronger argument about pricing homes more aggressively than Clark's recollection of his home sale fiasco 12 years ago.

By Michelle D. @ 08/18/08 08:57:05 AMreport abuse

Home value

We had the exact same issue last year when trying to sell our home. We had only lived there 2 years and it's value went from 224k and appraised at 275k. I tried to sell it myself at that price and didn't get any takers. Our neighbor two house down put theirs on the market for 269 and sold it for 260 in about a month. This is right at the peak of the housing bubble. We got a Realtor and still listed it higher then she suggested for 249. She wanted to list it at 239 but couldn't come to grips with the fact prices were dropping that fast.

Long story short we took a serious loss because we saw our home as a better value then anything on the market. Our biggest mistake was purchasing a second home, using a bridge loan on the house that wouldn't sell because we figured it would fly off the market at 249. We were dead wrong. We ended up selling for /ready for this...... 219k then add in realtor fee's and the 6k bridge payoff and we cleared out our savings account to the tune of a 10k check to the lender when we sold. OUCH. thankfully with the bridge loan we were able to roll about 30k of equity into the new house.

Morale of the story is from now on I WILL listen to the real estate expert. tough lesson

By Rex @ 08/13/08 12:23:35 PMreport abuse

Driving

Clark I hate to bust your bubble but I'm a damn good driver. Yea I know that I sometimes run off the road and grandma complains but she also knows that I'm a pilot who can fly fix or rotary wing aircraft. After all I do have enought sense not to speed up when a deer is standing besides the roadway like some fool's, The deer just might not like standing there anymore and not have enough good sense to keep from jumping out at yah. Grandma is good at running 'em down. But she don't bring the meat home, after all that tenderision

By Grandpa Gene @ 08/13/08 08:25:51 AMreport abuse

Clark's Home in the N Ga Mountains

Pls pass on to Clark. Clark, just to let you know as my wife and I were going by you house in N Ga. last evening (August 11, 2008)around 7:30 PM, there was a large back bear in your front yard. I am sorry that we did not have a camera in the car to take his picture. There will be more!

By George Harbour @ 08/12/08 03:55:20 PMreport abuse

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Aug 12, 2008 -- Inflated home values are in the eye of the beholder

What others are saying