Everday Real Estate agents are taking listings for homes that they know are over priced for the market and the neighborhood they are in. In some cases a slight increase over a recommended price point is fine.. You have a little more bargaining room when negotiating. Why would the seller want to market their home where they are substantially over priced?
I had a listing presentation where I asked the seller this question. In the course of going over my marketing strategy with him; I presented a detailed market analysis of the current homes in his subdivision and neighborhood that had sold, expired off the market and were currently active. The number I came up with was $60,000 LESS than he had his home on the market for recently with the previous agent. I explained in great detail how I arrived at the price I felt the home would sell for and what he should ask in relation to that price. He agreed with my analysis and accepted my recommended price point for his home.
SO, he answered my question by saying I told the gent I needed to get X amount fo money for my home. Reasons were irrelevant at the time. The agent came back a few days later and told him based on her research that the number was a justifiable number and she felt confident she could sell the home for what he was wanting to sell the home.
In turn, he listed the home and had it on the market for six months with this agent. In the course of those six months he said he got ONE showing. In turn he heard from the agent twice during the whole listing period. No feedback or recommendation to lower the price during his listing agreement.
I told him that when you price a home over value significantly ( I consider $60,000) to be significant) you need to be aware that you probably are not going to not only sell the home; but get anyone to look at it. With the Internet today; people are letting their fingers do the walking for them. When I go look for homes in a neighborhood and all the homes are priced competitively to one another and you have one priced higher than the average you tend to click on it to see why...but you are not going to view the home or put an offer in on the home.
Then you run into the problem I see more times now than ever before. You suddenly realize their are no showings and you need to sell. So, now you lower the price of the home dramatically to entice and offer and get someone to look at the house. A good buyer's agent is going to notice the price decrease and inform their clients that you are now motivated to sell. This could in turn bring out a substantially lower than acceptable offer on your home. The buyer is thinking well, if I can get it for this it is a great deal for me....
Now, you are at the other end of the spectrum where the listing is looking like you are in a panic mode....Thus pricing a home substantially over market value ha no positive benefits to it at all. It either is going to sit on the market and not get any showings; or you are going to lower the price so much the perception is going to be one of you need to sell NOW.
Dave diCecco
Realtor/Broker
www.davedicecco.com
