We frequently hear home sellers say,
“I can always come down but I can’t go up, just bring me an offer!”
An over-priced listing say’s a few things to a home buyer;
• The Seller is not in a hurry to sell
• The Seller is not committed to Selling
• The Seller is unrealistic and demonstrating they will likely be difficult to negotiate with.
Beyond the buyers perception of the seller, an agent who works in the community knows home values, what features, amenities and condition, in a specific price range. They’re working hard to show their client’s the best value properties in the buyers price range. They don’t want to loose credibility with their client by showing an obviously over-priced home.
After searching on-line, the buyer wants to see their selected homes in person, the over-priced home is now competing with homes that are properly priced in that price range and falls short of the competition. Setting up a situation where the over-priced home is dismissed out of hand, or worse, used to show what a great value the home next door is that’s priced correctly.
Buyers enter the home buying process having done a lot of homework in advance, they know the communities they’re interested in, they know what’s on the market, recent sales and they know values. Information is free flowing, before ever entering your home, the buyer likely know’s when you bought it, what you paid, what your taxes are, how much you owe on the mortgage and what it looked like when you bought it.
Unless it’s an investor, looking for the bottom dollar, buyers aren’t interested in wasting their time searching for and previewing multiple homes so they can make a string of low-ball offers in a low percentage play when they believe their offer will be rejected.
So how much over-market is too high, where do we draw the line on over-pricing? A lot depends on the neighborhood, but generally speaking, a list price that exceeds 10% of market value is too high.
Correctly pricing a home to sell is strategic, it’s both an art and a skill. Pricing in to the market you’re headed in to is the best strategy with a plus or minus of 3% depending upon whether it’s a buyer or sellers market.
For more insights on market values in your neighborhood, give us a ring – we’re happy to provide more specific information that applies to your home and values.