Keeping up with the market is critical to the success of any sale. In a market where a greater number of sellers are competing for fewer buyers -- a buyer's market -- homes that have asking prices even a few dollars too high can go unsold for months, or worse.

Choosing the right real estate agent to market your home, an experienced agent who's not afraid to tell you everything, will result in: 1) having a source you can trust for accurate information, up-to-date comparative sales stats, pricing guidance and advice, 2) a successful sale AND, more importantly, 3) a problem-free closing. A good agent provides all the facts necessary to help you avoid the worst mistake you can make -- overpricing.

Some sellers price incorrectly because they list with the agent who quotes them the highest asking price. With some highly optimistic agents this may be an honest one-time mistake. With others, it is a practice insiders call "Buying the Listing," and will cost you valuable time and a whole lot more.

What Happens When You Ask Too Much?

 

• Buyers are not fooled
  
  Remember how quickly you learned back when you were looking to buy the house you're now trying to sell?  All buyers do.  Buyers see a lot of homes in their price range (10 to 12 homes on average) before they're comfortable with making an offer.  They compare price, features, location and condition of the homes they inspect. The internet helps them become "expert" within hours.

• You're helping other sellers
  
  If your home is priced too high, it will not compare favorably with other homes in that price range. Simply put, other homes will have more to offer for the same amount of money. In fact, you're over-priced home is helping agents to sell other houses. If you're getting lots of showings but no offers, that's what's happening.

• Your home will not appraise at your asking price
  
  Most buyers require mortgage financing, which means an appraisal will be required by the lender. Appraisers look at similar homes in your area that have sold in the last six months. No matter how much you love your house, the appraiser will not see it with the same nostalgia. If you price your house, say, at $100,000 but it is worth only $80,000, banks will not lend anyone the money. Even if the buyer wants to pay $100,000, he or she can't complete the transaction. The bank will not OK the loan. You may have wasted months learning this.

• Appraisers Are Being Watched
  
  Government and private mortgage insurance companies are cracking down, making sure appraisals are not over inflated.

• Pricing Yourself Out Of The Market
  
  After three months at your too-high price, and no action, your real estate agent persuades you to lower the price. By this time your house is no longer a fresh, hot new listing. Buyers who might otherwise have been excited to buy your home have purchased other properties -- an important statistic to remember -- 98% of serious and qualified buyers who look at homes through Realtors eventually DO buy something. New buyers talk, to other agents, to neighbors: "How long has that house been on the market? ...what's wrong with it?"  Rumors grow.  They'll imagine all kinds of flaws other buyers saw that made them pass it up.  After three more months you lower your price again. Eventually a bargain hunter offers you bottom dollar. There are statistics, including psychological, to back this up.

• You lose time, or worse
  
  Backed against the wall sellers in "down" markets have often failed to cut their losses, or worse, lost their home to foreclosure, simply because they waited too long to face the pricing issue, or failed to trust their agent.

Is it OK to sell for less?

In some cases when you move 'up' you can profit in an expensive housing market. 

Example -- let's say the market is down 10% -- both your house AND the bigger house you want to buy are effected the same. They're both down 10%.  Which means that if you sell a $100,000 house for $90,000 you are in a position to buy a $200,000 house for $180,000.  No matter how you look at it, you made $10,000. 

You might even do better.  Remember that in a recession, sellers of the more expensive homes generally have a harder time selling and are anxious to look at all offers.  Donald Trump has made fortunes moving up in "down" markets.

Selling it yourself is not for the faint hearted