List Price – Daring or danger?
Some good discussion on the risks of settings your list price too high.
NATURALLY, EVERYONE WANTS TO GET THE BEST PRICE POSSIBLE FOR THE SALE OF THEIR HOME BUT DO NOT BE FOOLED BY REAL_ESTATE AGENTS WHO AGREE TO LIST HIGH TO GET YOUR LISTING AND THEN TALK YOU DOWN IN PRICE. If you start out with too high a price, then have to drop it later — your house becomes “old news”. This sellers info is crucial.
Start out with a price that is at or near market value and be prepared to adjust according to the feedback that you get from the market. Are you getting showings? Any offers? How much overall interest? How is your home doing compared to ones that are similar? All of these feedback is important to gauge interest in your home and whether or not the asking price is appropriate to the market.
It will be difficult to recapture that new-to-market frenzy of initial interest you might have had with a more realistic list price. As a result, your house could take longer to sell. Much longer. Find out what the market says about the price of your home.
IF YOU ARE ABLE TO SUCCESSFULLY SELL at an above market value to an inexperienced buyer, remember that your buyer will need to get a mortgage. The mortgage lender will require an appraisal and if comparable home sales over the last six months, and current market conditions don’t support your sales price, then your buyer won’t get the mortgage. Your deal can fall apart. By then, it’s often too late to renegotiate a price. Your house will have to go back on the market.
IF YOU’RE HOME HAS BEEN TAKEN OFF THE MARKET and come back on, or if it sits on the market too long, it becomes harder to get a decent offer. Prospective buyers will believe that you might be feeling the pressure to sell quickly and, as a consequence, will make lower offers. The irony is that overpricing your home at the onset may end up giving you a lower list price than you might normally have received!
When a home has been on the market for an extended period of time it becomes old news and is often called a stale listing. Buyers may ask what is wrong with it. Avoid these pitfalls by listing at the appropriate price to start with. The notion that you have to list high in order to have room to negotiate is a false one. The market and its buyers will determine what price your home will bring. Buyers need to be attracted enough to view the home and then be motivated enough to make an offer on the home. When the price is too high they may simply pass on even viewing the home. Be aware of what else is on the market. If other homes are competing with yours at much lower prices, ask why.
The best way to establish your selling price is to get a Comparative Maket Analysis from a selling agent in advance and then, with this information, take advantage of your agent’s experience to establish the right price based on what the market is telling you. In the long run this almost always works better than trying to force a high price.
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