We can always lower the price later!

By
Real Estate Agent with Samsel & Associates 0790808

Some homeowners are of the (mistaken) belief that they should price their home a tad above what it's worth - say, $340k for a home worth $300k - so that there's "room for negotiation." 

WRONG!

Pricing your home above its value actually decreases its value, and here's why:

  1. Timing is everything. The greatest potential for buyer traffic is the first 30 days. This is an actual graph for the number of showings that a listing of ours recently had in its time on the market.  Internet activity follows an identical pattern. The only time the number of showings will actually increase is when the price drops - but that bump is never as high as the number of showings in that critical first week.
  2. Showings shut out. Buyers' agents have an ethical obligation to do what is best for their clients. Showing them overpriced listings does not meet that criteria. Agents will always choose to show properties that are within their buyer's price range and that are priced appropriately. 
  3. Benefits the competition. Imagine that you're in a grocery store. Two identical loaves of bread are sitting next to each other on the shelf - one is priced $5 and the other is priced $4. If there is no additional value to the higher priced bread, the lower priced bread is more likely to get purchased. The same is true of your home. When a home is overpriced, it not only sits on the market but also acts as a selling point for correctly priced homes. It's a cue for buyers to say "I can get the same house for less!"
  4. Lender trouble. Even if there is a buyer willing to pay $340k for your $300k house, these buyers will not be able to get a mortgage. Today's lenders are extraordinarily cautious and base their loans on accurate appraisals.
  5. Time on market. Overpriced homes will sit on the market. Extended time on the market makes buyers think that there are problems with the house and are loathe to even see the house.
  6. Lower proceeds. When a home is listed above its value, it almost always sells for less than its value. Simply put, buyers presume that the seller is getting desperate to sell and therefore make a low offer. 

If you're serious about selling your home, contact us today to help determine the best possible listing price to get the results you want in the quickest time possible!

 

Posted by

 

 

 

~ Wayne & Jean 

Union County, NJ - a great place to live and work!

If you're looking to buy or sell a property in Union County, call us at 908-917-4189 or email TeamZuhl@gmail.com.

 

facebook  Pinterest  LinkedIn  Read Our Blog!

All opinions, information and data provided is deemed reliable but is subject to errors and omissions. Not intended to solicit other Brokers' clients. We cooperate with them fully. 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Selling
Location:
New Jersey Union County
Groups:
Agents who want REFERRALS!
New Jersey Real Estate Experts
Garden State Real Estate
Tags:
showings
home
sell
price
overpricing

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
4,162,676
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Wayne & Jean, great topic, and in more stable markets it is better to price correctly, so you don't have to lower and lose money in the long run!

Jul 20, 2014 05:50 AM #1
Rainmaker
2,051,128
Robert Bob Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX ( West of Houston) Real Estate Expert

Folks, Initial listing price is so critical and as you pointed out the first 30 days are crucial. The longer it sits the worst the whole situation becomes. 

Jul 20, 2014 06:53 AM #2
Ambassador
903,374
John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

All very good points, Wayne.  With many buyers wanting an appraisal contingency, there is absolutely no point in over-pricing.  The point, after all, is to get the home sold!

Jul 20, 2014 02:06 PM #3
Rainmaker
5,511,852
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is very good advice for home sellers. Accurate pricing is a key element for a successful transaction.

Jul 20, 2014 08:57 PM #4
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,338,967

Wayne and Jean Marie Zuhl

The Last Names You'll Ever Need in Real Estate
Want more information about Union County real estate?
*
*
*
*
Spam prevention

Additional Information