More info..
Because of the change in real estate market conditions, more sellers are competing for fewer buyers. So once again, it seemed important to challenge a long-standing "myth" of real estate.
"The initial listing price isn't that important because the price can always be adjusted down later."
Many homeowners believe this.
It is a myth.
Not true.
If most buyers first viewed your house because of a newspaper ad, a magazine, the internet, brochures, or the sign in your front yard, the initial listing price probably would not make a difference. The house would always be "new" to those seeing it.
But most buyers do NOT come to your house because of various types of advertising. That is the another myth.
Sure, buyers call on an ad, they often LOOK at that house, but not always. Once they talk to an agent, they may discover it isn't what they need (or want) at all.
However, they ARE talking to an agent. That agent knows the current inventory and will know of other property that DOES fit their needs.
Those are the properties that buyers look at, and THIS is how most buyers end up looking at your house, too. Because of other agents, not because of your ad.
Hardly anyone buys the house in the ad.
As a result, you need to get other agents interested in your property, and this is where your listing agent comes in...and why a good listing agent is extremely important. The listing agent gets buyer's agents looking at your home.
Those agents have clients who called in on other properties.
Buyer's agents are not swayed by advertising. They look at the needs of the client, where the client wants to live, location, condition, and other details of the property...
And most importantly....
...price.
If your house is overpriced, agents are going to show similar homes that are priced more attractively. Your listing will get passed over.
Agents pay MOST attention to homes newly on the market. There are fewer NEW listings than current listings. It is easier to keep an eye out for what is NEW, compared to the vast number of current listings.
New listings are on the "hot" sheet circulated in real estate offices. The MLS computer identifies new listings. Your listing agent may hire a service to distribute fliers to all the buyer's agents. There are office previews and MLS tours to showcase new listings. A lot of attention is focused on what is NEW.
With agent's looking at newly listed homes so aggressively, a properly priced home gets attention.
An overpriced home gets passed over.
You may be thinking, "But I'm willing to negotiate!"
Buyers aren't thinking in advance about how much you are willing to negotiate. They are comparing your asking price to other asking prices.
Plus, when your house is new on the market, you may not be willing to negotiate as much as you will later, once you've realized your error. Keep in mind that statistics show, quite often, the first offer is the best offer.
So what happens if you overprice in the beginning and get more realistic later?
You don't have all those important Buyer's Agents looking at your listing because it is NEW. A price reduction later in the listing cycle often gets overlooked. It is just one of many listings, not one of a few new listings.
As time passes, you could actually become desperate to sell because you've accepted a new job or because you have already bought a new home.
That is a recipe for receiving lowball offers, so you could end up selling for less than if you had priced the home correctly in the first place.
Agents know this stuff, but many sellers still mistakenly believe they should "price it high" because they can lower the price later, if necessary.
That is not the best strategy.
Top 3 Dangers of Overpricing Your Home
by Mike Carraway, Access Realty, Birmingham, AL
A LOT of sellers want to price their home above the market value and they do it for a variety of reasons...
Some say they want to have "negotiating room". Some say, "we can always come down later". And others say, "we just want to see what we can get - you know - test the market."
Theses are all good reasons from a seller's point of view. They aren't, however, from a property marketing standpoint. When you put a property on the market, you want to generate the highest traffic and demand in the shortest time possible and all of these so called reasons to overprice just hinder and impede the marketing process.
Danger #1
Pricing a home above the market value usually results in people going elsewhere and buying. They may love your home but if you have a similar product in your market for a lower price, they'll buy it - not yours. In effect, you have missed your buyer and now you will have to wait and attract another one at a later date.
Danger #2
Traffic and lots of it is what sells a home. Without human bodies walking through your home, it doesn't matter if it's the best deal around or the most beautiful in your neighborhood - it still won't sell. In order to get the most traffic possible in the shortest time, the price must be right from the very beginning. If the home is priced very near what you actually think it will sell for, you will get the most traffic - and offers.
Danger #3
Your home will sit on the market while YOUR buyers go buy other homes. You will have lower traffic due to the higher price and fewer people will be exposed to it. What happens when you finally decide to lower the price? People see the price reduction and it causes a couple of thoughts...
1) I wonder how much further down they will come?
2) I wonder if something is wrong with it?
3) I wonder how long it's been for sale?
Just these three will cause you more suffering from low offers and constant questions about whether you will carry part of the financing or not. You will soon grow tired of it.
The best way to avoid ALL of these problems, especially in a buyers market as we are in right now, is to price your home AT the market. Not a little over but right at the market value.
Want a secret? Price your home slightly UNDER the market value. You will have people fighting over it and will probably receive multiple offers. When you do - you can actually start a bidding war of sorts over your home and may even realize MORE than the market value.
by Mike Carraway, Broker, Access Realty, Birmingham, AL 800-840-0165
New Listings
New listings coming soon!
Broker
Access Realty, Inc.
1-800-840-0165