We all want to make the most money for our clients when we sell their homes, but overpricing can actually hurt sellers more than help them!
You can find a number of Intelligent Pricing Graphs online, which will show that more buyers will look at homes priced at market value than above market value! And of course, considerably more buyers will look at homes priced below market value, but what seller wants that?
The first 2-3 weeks a new listing is on the market are the most crucial for attracting potential buyers, so it is extremely important to price it right the first time!
If very few buyers look at a property during that time frame, it is likely to be overpriced. Unfortunately, even if it is reduced to the market value weeks later, the crucial "fresh on the market" time frame needed to attract the most buyers has already passed. This can cause properties to linger on the market with diminishing buyer interest over time. Usually, the final Sales Price for overpriced homes is less than the Original Sales Price.
Current market conditions are excellent indicators to help determine market value and price.
What are similar homes selling for in the area? How long were they on the market before they sold? What is the current financial market look like in terms of affordability for buyers - interest rates, down payment requirements, first-time home buyer assistance programs? There is a lot to consider when determining the best price for a new listing. Real estate agents are trained and educated in these areas, and can be an excellent guide through a multifaceted process.
Finally, there is a human element to selling a home, which should be considered.
"Sticking it to the Buyer" is not a good strategy for sellers, nor is "Giving Away the Moon and Stars" a good option. People, for the most part, can see that a deal that mutually benefits both sides of the table provides a more compatible world for all of us, and those deals will likely get the most attention of all.
Below is a real-time, interactive chart of Frederick, MD comparing the final Sales Price to the Original Listing Price in relation to the length of time the properties were on the market. If you hover over the bar graph you will see detailed statistics.