- You will lose the
excitement that a new listing generates. Most activity on a listing
comes within the first 30 days. An initial high price will discourage
buyers, causing you to miss out on pent up demand.
- You will lose the
most qualified prospects! Buyers will not “just make an offer” because
they may never even see your property. They will view the properties
that are priced within their purchase power range, knowing that they
cannot afford anything above their price ceiling.
- Over pricing
helps sell other, more competitively price homes first. Your home may
be used to demonstrate the good value of other properties. Your
objective should be to enter the market in a position that will attract
prospects, not to drive them away.
- Your home may
become “stale” on the market. Prospects may wonder why it has been on
the market too long, or if something is wrong with the property, even
after you lower your price. You may even have to settle for less than
market value. A house takes on a reputation surprisingly fast, so don’t
wear out your welcome on the market.
- If you do get an
offer, the contract may fall through because of appraisal problems. The
lender may not be able to justify the price as it relates to loan value,
consider it a high risk and refuse to lend the buyer mortgage funds.
- You lose a strong
negotiating position when your home is on the market a long time, both
financially and mentally! Prospects will not “rush” to make an offer on
over priced property, and you may feel compelled to accept less when
they finally do.
The agent you list your
home with cannot set the sales price of your home any more than your stock
broker dictates the price of a stock sale. The selling price is simply a
function of supply and demand. Never let an agent bid for your listing.
Most unsold listings that expire on the market are because of poor
pricing, subjecting the owners to the risks discussed above. Select your
agent on their ability to negotiate, competency and ability to reach the
market. Above all, select someone you trust!