What is your listing strategy? How should you price your home to sell?
Many sellers think an overpriced list price is not a problem because the buyer will see through that inflated number and make a market priced offer. The reasoning goes – if you price it at market, then the buyers will come in low. Instead, it is preferable to negotiate down to the correct price that the sellers always planned on accepting.
There are some big problems with that approach.
1. The wrong people look at the property – if any look at all. People buy in price brackets and they look in those same brackets. An overpriced property compares badly with other properties that the buyer is seeing on line and in person.
2. Cooperating agents don’t want to lose credibility with their buyers by showing them overpriced listings. Good agents have a sense of value based on years of experience. An inflated price does not fool them into showing the property.
3. Cooperating agents know from experience that market priced offers on overpriced listings frequently are rejected. After all, there is some reason that the seller is sticking to the inflated price – like an unreasonable belief in the property’s value.
4. Many buyers are embarassed to make offers considerably below the list price. After all, how do they know that the seller is expecting that.
5. The property may become over exposed and shopworn. Buyers and cooperating realtors begin to assume there is something wrong with the property and do not put it on their lists.
6. Even later price reductions do not regain the lost market. Many qualified buyers who go to overpriced listings eliminate them then and forever forward. It doesn’t matter what the new price is. The buyer has moved on.
7. When certain buyers see that a property has been on the market for a long while, they are motivated to make an offer – and it will be low, very, very low.
How to solve this problem
Simple – listen to your realtor and price it right the first time. Don’t keep the price that you are willing to take a total secret cloaked in tens of thousands of dollars of excess list price. Instead, price your home at that price or close to it! Remember, a home is not like a fine bottle of wine – it does not get better the longer it sits on the shelf!