Homeowners have heard about properties selling for thousands of dollars more than the asking price after bidding wars. Now that they've turned into sellers, they believe they can overprice their home, but the market is seeing more price drops!
In this hot housing market, some home sellers are getting greedy, and it's having a negative effect on them.
Many sellers set their prices too high, hoping to drain every dollar out of purchasers who are willing to pay significantly more than the asking price, typically in cash. A growing number of vendors realize they'll have to get down to business.
According to Zillow, an online listing service, 9.4 percent of houses on the market recently received price reductions, up from 8.6 percent the month before. Previously, price reductions were 7.8% and 7.7%, respectively, demonstrating that the over-eagerness has expanded.
"Many of the price reductions are the result of sellers becoming overconfident in this market and asking for too much," said Eli Beracha, a Florida International University real estate professor. "Right present, price drops aren't happening for residences that are fairly priced and show well."
According to real estate broker Patty DaSilva of Green Realty Properties in Cooper City, the price reduction can sometimes work in a seller's favor since they broaden the pool of potential purchasers, who may then be ready to bid up the price to get the property.
According to Gene Whiddon, a real estate agent at Better Homes and Gardens Real Estate in Fort Lauderdale, a home that is priced correctly will sell quickly. In only two days after listing a two-bedroom, two-bathroom property in Fort Lauderdale, he received three full-price offers.
According to agents, the increasing number of price reductions does not imply that the market is becoming cheaper. According to Adam Docktor, a real estate agent at Compass in Fort Lauderdale, "it merely means the pricey homes are being reduced to a healthier level."
The market is still heated in general. Recently, the median price in Palm Beach County was $480,000, up 20% from the previous year. In Broward County, it was $495,000, up 19%, while in Miami-Dade, it was $500,000, up 20%.
Real estate agents refer to excessive prices as "make-me-move" pricing. According to Dutton, sellers want to see how much money they can make instead of moving out of necessity.
According to a poll conducted by realtor.com, nearly 25% of sellers put their properties on the market only to see how much money they can make. Almost a third of respondents indicated they planned to ask for more money than their home was worth.
"Finding the highest potential striking price through tiny price modifications is sometimes more tempting for sellers so they don't leave money on the table," said Bonnie Heatzig, executive director of luxury sales at Douglas Elliman in Boca Raton.
According to real estate broker Patty DaSilva of Green Realty Properties in Cooper City, if a home has been on the market for more than a few weeks – with no major maintenance issues – it's usually a clue that it's priced too expensive.
"Buyers can tell when a product is expensive," she explained.
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