While it may seem like a good idea to price high to get the most money out of your home, you may well be setting yourself up for failure. It could be the kind of mistake that will cause you to a lot less than you wanted to, or not selling at all; wasting valuable time and money.
Properties initially priced above fair market value tend to sell for less than they could have if their original prices had looked more attractive to buyers.
It sounds counterintuitive, doesn’t it? But think of it this way:
- Market interest is highest in the first two weeks and may wane after four weeks, depending on the price point. You absolutely need to capitalize on the first two weeks.
- As listings become stale, market psychology reduces the salable price and buyers are less interested in your home.
- It forces price reductions in order to sell the home.
- Every price reduction is obvious whether in Zillow or the MLS.
- All of this will affect your negotiating power and time on market.
Recently our market has led homeowners, who don’t really need to sell, to “test the waters” leaving sellers that really do need to sell having to keep up, and inflating numbers that shouldn’t have been that high in the first place.
As we continue to steer back to calmer waters, it is almost certain that you will need to price on or ahead of the market in order to sell at the highest price.
In a shifted market where pricing is falling, this is amplified further, resulting in sharper decreases needed, and longer time on market.
In a nutshell: Determine your list price carefully. Anticipate where the market will be in a month or two. Price on or slightly below market in order to generate the most offers.
Please let me know if I can help you understand this further or email you the accompanying graphs.
Reference: Shift by Gary Keller