The news of low inventory and many properties selling above asking price in multiple offers in hot neighborhoods makes many sellers eager to price their home high because they want to make sure they get the highest price possible.
Pricing the home correctly is really, really important. Of course, you don’t want to underprice the home and give it away and leave any potential funds on the table. In the current market place, where inventory is low, pricing a home slightly under value will create a feeding frenzy as buyers will be excited about a potential deal and the final sales price will actually be bid up to or just above market value. So, underpricing actually poses a relatively low risk of not getting at least market value for your home.
However, overpricing your house in the belief that you can make sure that you do not leave any money on the table and that you can reduce the price back later if you don’t find a buyer at the asking price is a strategy that can backfire terribly.
Most of the traffic to your home, will happen during the first two weeks, particularly the first two weekends on the market. You are most likely to get a full price offer during this time. In the Greater Seattle area, no offers within a 30-day period (10-day period in urban or hot neighborhoods) or little to no traffic at the first open house means the price is too high. Every day the home sits on the market makes it less valuable in the minds of buyers, and today’s buyers are completely value driven. By the time you reduce your price, you have most likely missed out on a surge of interest in properties like yours.
Also, when the price is lowered, buyers may wonder if there’s something wrong with the property that kept other buyers away. So to keep from selling your property at below market value and from wasting valuable time, don’t fall into the overpricing trap.
Not only do overpriced properties not sell at the inflated market price but they often sell well below actual market value when they do sell because most buyers will have lost interest or are afraid of paying full price for a property nobody else wanted.
Ultimately, buyers determine the right price for a property, not sellers. The market price for a home is determined by what an able and willing buyer ultimately pays for it. There are certainly things that homeowners can do to influence buyers’ perceptions of their home’s value and hence increase the price buyers are willing to pay for it. But, ultimately, the buyers will set the price.
A dedicated and experienced real estate agent who is familiar with the market in your area can help you price your home correctly, help you market your property effectively and make suggestions what you can do to get the highest return on your home.
Kerstin G. Brooks
Brooks & Heinze Seattle Real Estate Team
Skyline Properties, Inc.
http://www.propertyinseattle.com/listings.html
Kerstin G. Brooks, Broker 