The argument for still pricing a home correctly.

By
Real Estate Agent with HomeSmart SA541769000

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The last few months have seen an unprecedented tightening in many real estate markets across the country.

In popular areas sales have become skewed overwhelmingly in favor of sellers. Buyers seeking to purchase a new home have been met not only with dwindling inventory but with accelerating prices. Sellers have been able to bypass repairs or eliminate concessions.

In a market that exhibits these characteristics, certain buyers, ones that have access to additional cash have a great advantage. It allows them to make offers with larger down payments or to outbid other buyers in a multiple offer situation.

But what happens when the seller(s) or the seller’s agent adopt a mindset that they set their own price and ignore the fundamentals of pricing a home correctly? Several things happen and all of them are bad.

An overpriced home may effectively eliminate buyers that really want the house, but simply cannot meet the sellers' demand for a value beyond what they can afford. Instead, the seller receives offers that are too good to be true but have little chance of ever making it to the closing table.

One of the main advantages that sellers have in a tight market is the ability to project an image that “This is your chance!”, to the hungry group of buyers that have been anxiously waiting for something new to become available. That honeymoon period only lasts a few days and then the “This is your chance!”, becomes an “I wonder why it hasn’t sold yet?”

Even in today’s hot market, an overpriced home will still sit on the market too long. A house that sits on the market too long makes the listing agent look bad. It injects a level of concern into a buyer’s psyche and leads to lowball offers or more intense scrutiny of the condition of the property.

A solid offer by a sincere buyer at the correct price is still the best recipe for success. Don’t let greed or lofty goals cloud your vision. Pricing a home correctly still matters.

 

Posted by

Joseph Domino

© 2010-2018 Joseph Domino All Rights Reserved

Comments (5)

Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Joseph and excellent blog information to share with us here in the Rain.  Make it a great day!

 

Feb 11, 2021 09:30 AM
Joseph Domino 480-390-6011

Thanks Will.

Feb 11, 2021 11:00 AM
Mike Warfel
Mike & Rita Warfel Real Estate LLC - Avoca, MI
Associate Broker

That's all true although it doesn't make choosing the correct price simple. The tightness of the market forces an increase and needs to be allowed for when choosing a price. As a listing agent representing the Seller we are obligated to obtain the most money with the least amount of hassle for the Seller and hopefully as quickly as possible. That is what we tell every Seller as our pledge to them. 

Feb 11, 2021 09:34 AM
Joseph Domino 480-390-6011

Pricing can be risky at times. Just have to be careful not to think you can ask any amount.

Feb 11, 2021 11:01 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Joseph, great post with the best points!   I have had Sellers tell me to list above fair market value.   But, they run a risk having buyers shy away, as prices are coming in above list, so then you are WAY above, and the appraisal is still on the line.

Feb 11, 2021 09:57 AM
Joseph Domino 480-390-6011

There are still some fundamentals that we need to observe.

Feb 11, 2021 11:02 AM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
The House Kat

An overpriced home is a problem in any market! Including a seller's market.

Feb 12, 2021 06:05 AM
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

These are good points you have shared Joseph Domino 480-390-6011 

Feb 12, 2021 06:59 PM

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