Here are 3 reasons why pricing your property right from the start is more crucial now than it has ever been:
Time: Odds are that, if you really want or need to sell, that your home will eventually sell. And when it sells, it will probably be at the property’s market value at the time of the sale. Pricing correctly from the outset significantly increases the chance for a faster sale with less inconveniences and a greater financial return. A newly-listed home will generate an initial surge of activity. This activity peaks in the third week after listing. By overpricing you deter interest in your home when activity is usually at its peak.
More importantly, overpricing in a 'declining' market will put a seller in the unenviable position of 'chasing the market down' when it comes to price adjustments.
Competition: Buyers educate themselves by viewing many homes online BEFORE they even talk to an agent or step foot into a home, so they will know, up front, what is a fair price in the current market. In actuality, the FIRST showing with a buyer happens online...if that goes well, then you have a good chance that they will schedule an appointment with their agent to actually walk through your home. If your home is not competitive in price with those they have seen in their research, it will not even make the showing list and will probably not sell. Buyers typically look at home within a $10,000-$15,000 price range. If your home is not priced within the correct range, it very likely will not be exposed to its potential or to the maximum amount of targeted buyers.
Reputation: Overpricing, especially in a market like this- where competition for buyers is at a historical peak, causes most homes to remain on the market too long. Buyers, aware of a long exposure period, are often hesitant to make an offer because they fear "something is wrong" with the house. After too many months on the market, the only buyers who will see your property are those that are new to the market, and your property will be labeled as “overpriced.” Buyers and their agents always look for “days on market” when searching the Multiple Listing Service (MLS) listings. Day-old bread, leftovers, and overstocks are always discounted. The longer your home is on the market, the lower the price you will eventually be offered.
The Bottom Line: No matter how much you may appreciate your home and its particular special features, the buyers ultimately set the price by what they are willing to pay for the property. Overpricing in today’s market, either by you or by an agent willing to suggest a higher price in order to obtain the listing (what we ethical agents refer to is when an agent is said to be "buying a listing") , begins a chain of events that often works against you. This market is bad enough, and you most certainly do not need anything else hampering your efforts to sell. In a down market, if you are willing to price at or just below the level where homes like yours have recently sold, you will be able to sell your house. The flip side of this reality is that if you are unable or unwilling to price your home at or below current market value, you may just be better off not putting it on the market at all.
Seriously discuss the pricing issue with your agent...objectively review recent sales as well as current on-the-market properties. Try to view all of the information from a buyers perspective, you'll end up getting more money in the end...
