In a nutshell, this is why I always tell my Sellers to price the home at market value or even below. It creates a “bidding war” type of mentality. Great post by Stephen Munson and well said.
Overpriced Homes-Sell Slower and For Less If there’s anything we can take away from the plethora of Bank Owned Foreclosures is they certainly know how to price a home to move!
I maintain that you almost always shoot yourself in the foot by overpricing your home. Your home will almost always sale at or above market value by pricing at or below market value.
So why is that? Well think back at when YOU were buying a home. Remember when a “great deal” came on the market and everybody and their agents were “swarming” to the open house? You placed your offer only to find out their were 10 other offers and they were going above the asking price? This “bargain price” created an auction affect and got people excited. THAT is how banks are pricing their homes and if you want your home to move quickly and for the most amount of money, this is a winning strategy.
So why don’t sellers do it? I think it’s because there’s a little voice inside of our head (and pocketbook) that says “what if”.
“What if”- I can get $50K over market value. (even if someone were excited enough about your home to pay $50K over appraised value, their lender won’t loan the money if the value isn’t there. No loan, no buyer)
“What if”– I don’t get multiple offers and I only get one offer (May be still overpriced!)
Often fear (and greed) hold us back from making smart choices! Don’t feel bad though, even Real Estate Agents are guilty of senselessly overpricing their homes. Somehow when it’s our turn to sell all of our “market knowledge” becomes goo and leaks out of our ears! It’s like the hairdresser with bad hair!
The bottom line is, almost always, an Over Priced House will sit on the market longer and sell for less than it should have had it been priced strategically from the beginning.
Copyright © 2010 By Stephen Munson,Munson RealtyPasadena|Overpriced Homes-Sell Slower and For Less*overpriced homes,overpriced house