DANGER of OVERPRICING
When talking with sellers about listing their home often times I hear the strategy of setting the initial asking price high and then coming down in price if it does not sell. This is really not a good way to operate in a traditional real estate market.Over the last few years sellers were successful using this strategy of listing their property with a high sales price. They were in an extreme sellers market. Our prices were continually going above the most recent sales price.
Now that the market has slowed and cooled off and it is necessary to change strategies when deciding on an asking price.If you start out with too high of a sales price, then decide to drop it later your house has lost that initial surge of Buyers that new listings typically get. This strategy could hurt your chances of selling your home quickly. I think home sellers want to try this strategy hoping to find an uneducated buyer.
Our real estate markets have become very efficient. Real estate information is easy to get and it travels quickly. Many buyers start their home search on the internet. Today's buyers are more educated and informed. Properties are listed on the MLS and most buyers have access to these listings quickly. The chances of pricing your home very high and selling it to an uneducated buyer is very slim. In addition there is an ever increasing inventory to compete with. Overpricing your home only helps another seller sell their home Let’s say you price your home high and later and gradually lower the price. Once your home has been on the market awhile it becomes stale and is harder to get a good offer. This is called chasing the market. You have to stay ahead of the market in order to have your home sold.
Potential buyers always ask how long a home has been on the market. If they see it has been on the market awhile they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received