You don’t get a second chance to make a good first impression
By Al Ricci
It is important to price your home correctly when it first hits the market.
How many times do we hear a seller say “this is what I need to get out of the house to move on,” or “my house is better than the other comparables so I should get a higher price.” Sometimes that may be true. If a seller cannot “net what he/she needs,” then maybe it’s not a good idea to sell. If the seller has remodeled, it does not necessarily mean that a higher price will be the result.
What is important, is that the home shows the best it can, and that the offer price is close to market price. There is no good reason to “leave room to negotiate” or ask a price that will not be supported by the recent local sales. Ultimately, sellers decide what offer they will accept. Even if the home generates multiple full price offers, the seller is under no obligation to accept that price. Placing a listing on the MLS is merely an offer to receive offers. If a full price offer had to be accepted, there would never be “bidding wars” to drive up the price over asking.
Home sellers who want to overprice their home may want to rethink their strategy. Think about the last time you had a yard sale. Remember when you overpriced some items because you really did not want to sell them, or you had too much into it, or that the item had some “special value”? You probably hauled the item back into your garage. If your home is overpriced, there is a chance you will pass up a good buyer. In the current age of information and technology, the buyers know the market. The closed sales within six months show the basic home values in a local area. Sales pending in escrow are an indication of the most recent values. That information is a little harder to obtain, but your realtor has a good idea. The asking price of active listings shows the direction of the market. The overpriced and underpriced homes have a bearing on the value, but do not determine the market.
Buyers have access to tools to see how long the property has been on the market. The longer the home is on the market, the stronger the assumption that the home is/was overpriced. The chances of selling the home as a new listing draws 50 percent more buyers than a home that is on the market for 50 days. The longer the property is on the market, the less showings, less excitement, and more doubt as to why it has not sold. The belief that people will make an offer if they like the home is not likely. Homebuyers search out their new home by price, and if the home is out of their price range, they are also off your radar.
The first impression of your home is on the day it hits the market. If you overprice the home, you may wind up chasing the market down to a price that you may have otherwise accepted, had you priced the home “right” to begin with. At the end of the day, buyers will determine the market value of your home, much like water seeks its level. Even if your home is priced below market, chances are the offers will bring it to, or over, the market. Realtors know their market and over time, they have contributed to the appreciation of prices. They know the trends of the past and forecast the future of our real estate market.