It’s not uncommon for homeowners to set an initial listing price for their home, and acknowledge to their agent that “while it might be a little high, we can always reduce it.” This might be a great philosophy when it comes to selling furniture on Craigslist, but unfortunately it simply doesn’t hold true in the housing market. In fact, overpriced homes typically take longer to sell and end up selling for less than their initially lower-priced counterparts!
Here’s why: Prospective buyers excitedly check the market each morning for brand new listings (which is why you’ll likely get the highest number of showings in the first couple of days). After the first few days, most serious buyers in your area will have already scouted your home online, and will have made the decision to see it in person or pass due to price or condition.
Fundamental psychology is also at play — if your home lingers on the market for too long, buyers will see that and wonder what might be wrong with it, or why no one else wants it. After all, who wants a home that nobody else likes? It sounds like a bit of an exaggeration, but it’s not uncommon for our buying clients to curiously wonder why a home has sat for so long.
In fact, some real estate agents suggest pricing the home slightly under market value to incur a quick sale and a bidding war. In this hot seller’s market, bidding wars surely aren’t uncommon! We encourage considering the comparative market analysis (CMA) or even investing in an appraisal to determine market value. Ultimately, the listing price is set entirely by the homeowner, but we’re always here to help!