If you are deciding to put your home on the market in the near future or currently have your home on the market, besides deciding on a Realtor to help you list your home, making sure your home shows to the best of its ability, deciding on the list price goes up there in importance with the other two items.  If your home is over-priced, do not be surprised if you do not get many showings after the initial listing period.  This is not the market of 2005-2007, and as a seller you need to take that into consideration.  You as a seller could be competing with a foreclosed home, where the bank wants to get it off their books, so they will and can sell it for a lower sales price than you.  There are markets where prices have begun to increase again after the drop in 2008 onwards, such as where I live in the Washington DC area.  Realty Times recently published a good article about the importance of listing at today’s market price.

Listing Prices in Today's Market

by Realty Times Staff

Today's market is volatile. With record low interest rates and rampant foreclosures, buyers are less willing to pay top dollar for homes. They know good deals are out there and aren't willing to pay more. This means sellers must list their home competitively.

Sellers are competing with foreclosed homes down the street that have the same amenities for a fraction of the cost. They are also competing with newly constructed homes which builders are desperate to move.

There are sellers who are unwilling to accept that their home is now worth less than it was just a few years or months earlier. This can be an especially hard pill for underwater sellers to swallow. No one wants to sell their home for a loss, especially in today's economy. Yet, people still get new jobs and have new life changes that mean they need to move on, move up, or downsize.

With prices, it's about first impressions. Think about how you shop online. Google and eBay are great examples. You search for a particular item and right off the bat weed out the top priced products. After all, in most cases it's basically the same thing. Why would you pay more?

There is only one reason you'd fork over more money. That is if the product or transaction will have certain perks. In real estate transactions, those perks could be sellers paying for closing costs, paying for inspections, having inspections done ahead of time, and having high-end finishes or a move-in ready home. These perks aren't worth what they once were, but they can still be marketed.

Homebuyers also begin their home searches online. In most cases, they set search parameters based on their budget.  By pricing a home lower, you are more likely to be included in more searches.

There are benefits of being priced under the competition, such as you are likely to get foot traffic and showings. You are more likely to have multiple offers. These could easily translate into a sale, especially if a home is staged to its best advantage. Homes that are overpriced, however, end up sitting on the market for longer. This could means months or years of waiting.

Buyers in today's market are savvy. They have the upperhand during negotiations. With a 9.5 month supply of homes on the market, demand is far less than supply, which means they have sellers right where they want them.

Sellers must price their home for what it is worth in today's, not yesterday's market.