Pricing a home for sale is much more of an art than a science. Each home’s value falls inside of a range, and the price the buyer and seller agree on determines the exact value of the property. If priced competitively from the very start, a home will sell at the high end of the value range. The longer it lingers, the lower it lands in that range.
The ways Trying Way too high Will likely End up costing You
Price: The battle between seller and agent
Homeowners have a very limited perspective on the real estate market, since they are only focused on one home: their very own.
On the other hand, successful agents like Nick & Cindy Davis live and breathe our local markets daily. We have our feet on the street, and possess a great knowledge of current market conditions because we work together with buyers, tour homes, and also have first-hand comprehension of what moves.
Simply because they have limited knowledge, many sellers over-value their houses. They may assume that the agent just wants to price their home – their biggest asset – at a low price to get a quick sale. And so a friction begins.
But we know that homes that happen to be priced right and show well will sell in good times and bad.
First impressions make the difference
The market typically reacts to a new listing in the first couple of weeks, so do all you can to really make it attractive to buyers right from the start. Price your home right, and take all of your agent’s advice about cleaning, De-cluttering, painting and prepping, and your home should sell without incident, as well as for the best price.
List at the wrong price or with the home not in its best showing condition, and you’ll leave a negative first impression on the market. As time passes, a listing starts to lose its momentum as newer, more competitive homes come up for sale. As the length of time on the market increases, interest in your home decreases, and the listing becomes stale.
Next stop: price reduction
A price reduction inevitably occurs after weeks or months of inactivity. In the event the seller doesn’t price the property within striking distance (say, 5 % in most markets) of what the purchaser perceives the value to be at the time, the seller needs to come down in price. Often, they come down, but still not enough.
If the sellers miss the market twice, buyers won’t take them seriously, and will hold out for the next reduction.
The home will eventually get into the correct price range for the market, and a buyer will strike. But they will most likely punish the seller by coming in through an offer far lower than they would have, had the home come onto the market with the right price.
Once sellers lose the momentum of being new in the marketplace, they’re at a disadvantage when it’s time to negotiate.
Risk of the market changing
What’s worse is that markets can start to decline over time. A seller may list in March to a healthy market, but their chances of making a top-dollar sale fall as inventory piles up, the economy slows, mortgage rates rise, or any number of factors come into play.
Come September, the value range of the property is lower than it was in March. A change in market conditions can be a risk a seller takes by pricing way too high.
Potential for showing poorly
After some time, sellers can get lazy, and keeping the house clean and organized becomes a chore. Weeds come back, dust bunnies sneak in, and the house doesn’t show as well as it did when it first went on the market.Buyers who turn up once the pricing is right will have even more reason to penalize the seller with a low offer.
Advice to sellers
For anyone who is seriously interested in selling your home and have a strategy and motivation to move on, take pricing seriously.
In the event you and your agent disagree with regards to the price, although not by a lot, it’s worth trying the high number. But come with an upfront plan to reduce the price quickly, and use that reduction as a marketing activity.
The marketplace will respond positively to a seller who shows that they are seriously interested in selling. You do not want to utilize the agent who says that they can sell it for the highest price, when the data says otherwise. We are always ready to assist you. You can reach us at 813-300-7116, or you can simply click here and we will be in touch shortly.
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