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One of the main reasons why sellers price a listing too high, is because they “want to avoid a short sale”. This means “they price too high when their home equity is low, in order to avoid selling short”. Sellers also price too high when realtors give them an “unrealistic estimate value,” in order to beat out other potential realtors who are competing for that listing, and to ensure it for themselves. The high listing price however eventually gets dropped as well, and the new lower price begins to resemble the price suggested initially, by the other realtors.
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Sellers also price too high when they “don’t have a deadline to sell”. These “unmotivated sellers” test the waters too see if they could sell for that high asking price, even if it means waiting for a while. Even if they “manage to find someone who is willing to pay above the fair market value, an appraisal will likely not support the asking price, and they will probably be forced to re-list”.
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It’s important to price a listing correctly, because the price is the first thing potential buyers consider when looking to buy. If the asking price is too high, the amount of interest in it will be quite small, because the price won’t seem fair when compared to other listings of similar size and style. Listings that are priced correctly will receive a lot of attention, especially in the beginning, because they will be perceived as being priced fairly, in comparison to other listings.
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Having a lot of attention increases the likelihood of “attracting multiple buyers,” which makes it more likely that sellers will be “able to negotiate a higher price,” as opposed to being forced to settle on a low price as a result of the listing going stale. Realtors should know that setting the appropriate price from the beginning is the best strategy in selling a home “quickly, and for the best possible price”. Research has shown that “overpricing a home, and letting it sit on the market usually leads to it being sold for much less then what the sellers had originally asked for”.
According to the 2013 statistics, homes that sold within a week were on average sold above the asking price, whereas those homes that were on the market for a few months, were on average sold way below the asking price. This means that setting the right price from the beginning, is the best strategy in selling a home.
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This means that it is important to get help from a knowledgeable real estate representative. You want the agent to do “a comparative market analysis, which would include an analysis of the houses that sold in your area and the prices they sold for, a look at houses that are still on the market and are your competition, and a look at houses that were on the market but did not sell”.
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Therefore, choosing a knowledgeable real estate representative who will price your house correctly from the get go is crucial in selling your home quickly, and for the best possible price.