Asking Price: Start High Or Start Low?
Many homeowners are inclined to start with a high asking price when selling their homes. They reason that they can always come down when no one responds. This is an erroneous and potentially dangerous assumption.
We all know that the housing market is pretty tough right now. There’s a lot of homes on the market, so you know upfront your house is competing with a lot of other listings. If your house competes with other houses that are priced right, and your house is priced wrong, you’re going to lose.
Put yourself in the shoes of a buyer. A buyer will most likely talk to a buyers agent. This agent knows the market. He knows the prices and he will know immediately of your house is priced too high. If so, he won’t waste his valuable time by taking his clients to an overpriced home. Result: no showings.
You may be very willing to negotiate. A lot of homeowners currently are. You’re hoping for an offer, so you can cut the potential buyer a deal and make everyone happy. But no one is going to make you an offer. Not on an overpriced listing. You’ll be hard pressed to even get showings on your home, let alone offers.
But let’s say that you’ve had an asking price that is too high, and now, after 3 months, you want to come down to a realistic level. The good news is that buyers will notice your home pretty quick. The bad news is that they will immediately wonder what is wrong with the house. They reason that the house should be sold after 3 months if the price is right and the house is in order.
If they do find out that you’ve just lowered your price, they might draw the conclusion that you’re in a tight spot. They reason that you’re facing some kind of deadline and will give you a low ball offer, hoping to buy your home on the cheap.
These are just a few reasons why you should always start with a solid, realistic asking price for your home. Overpricing can be done in an extremely hot market, not in today’s slow real estate market.
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