If it's priced right the buyers will bid on it. I recently had a properrty on the market for 6 months. After 2 price reductions totalling almost $100,000 of the original listing price I received multiple bids. I heard several similar stories from other agents in my office today.
One had the property on the market for a year lowered the price several times and finally got multiple bids. Another agent with a property on the market for a long time lowered the price lowered again and had it staged and then received multiple bids. It seems that once the right price level is reached all of a sudden it's bid on. If it's priced low enough it is perceived as a great deal and more than one buyer want it.
This pricing strategy worked the last few years when the market was very hot. I think it works in a cool market as well. It's just not the same frenzy. Last year I had a seller who wanted $725,000 for his place. I had to convince him that a listing price of $699,000 would be a better strategy to acheive a sale price of $725,000. I explained that buyers today are searching the internet, they have to type in a price range. The comps for his apartment were around $650,000 -$700,00. I told him that he would miss all the $650,000 - $700,000 buyers who probably could spend more but they have to be exposed to it. It was a beautifully renovated condo with a great view. I knew it would be bid up if it was exposed to as many buyers as possible. He received 11 offers several were at or above $725,000.
In the old days like 2002 :-) people still looked in the newspaper, many still do The New York Times still pulls but they search differently in the paper it's set up by neighborhoods not price. A buyer would still see an ad for a property that maybe was a little above their price range and would go see it. A computer search has a minimum and a maximum. They will only be exposed to exactlty what they type in. Technology makes pricing more important. I beleive a lower listing price with maximum exposure will give the seller a higher sale price in the end than with a higher list price.
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