The Problems Caused by Starting at Too High a Selling Price
then Waiting Too Long to Drop the Price.
We all want to believe our home is worth more than it probably really is. It's a natural reaction for those who love their current home even though, for whatever reason, it's time to move. So there's a tendency to price it too high, thinking that if it doesn't sell, you can always "lower the price later." In fact, nothing could be further from the truth.
Even if you do manage to get an offer at an "above market" price, your buyer will likely need to get a mortgage. The mortgage lender will require an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won’t appraise and your deal will fall apart. You can always attempt to renegotiate the price, but only if your buyer is willing to listen. And at that point, any sense of trust he had in you, and his own Realtor® who suggested that he accept that high price, will be gone. Your house will most likely have to go "back on the market."
Once your sales contract has fallen through and you home goes back on the market, it is harder to get a good offer. Many Realtors® aren't anxious to show a home that has been on and off the market. They may suspect that you'll be just as unreasonable the second time around, demanding a price or terms that just won't fly. Worse, those Realtors® who do show your property may bring potential buyers who think that by now you might be getting desperate, so they will make only &qout;low-ball" offers.
When you finally do accept reality and drop your price, your house may have already become "old news." or ""stale on the market." Remember that the first people who come to see your home when its first put on the market are going to be Realtors® "on tour." If they think your home is over-priced, they won't show it to their prospective buyers. So, if you don't start at a realistic price, your house could take much much longer to sell.
Listen carefully while your listing agent explains why your home is worth what his or her Comparative Market Analysis (CMA) says it's worth. Ask questions, if you wish, to assure yourself that your Realtor® used truly comparable properties in arriving at the value of your home.
In the end, if you overprice your home upfront, you may actually end
up with less than you would have received if you had accepted the professional judgment of your Listing Agent Realtor®.
That old saying about "Getting it Right the First Time" is even more important in real estate pricing decisions.
Michael Saunders & Co.
330 John Ringling Blvd
Sarasota, FL 34236