Common Selling Mistakes: Starting High on Your Asking Price
What Have I got to Lose?
Starting out high is a hot market idea that contains some serious downsides in a cool real estate market. In this age of information, buyers can compare prices of sold properties quite easily on the Internet. That Internet comparison process is what creates the market price for your property. One constant is that properties sell very close to market price. Properties listed well above market value just sit there chewing up time and money.
Since the best selling opportunity occurs when a property first appears in Multiple Listing Services, an overpriced house is a turn off. That one perfect buyer may not want to look, or your property may attract lookers only, folks that just want to confirm why another property is a good buy.
A stigma can get attached to properties too long on the market, as wasted showings pile up. When the property eventually sells, it may be at the low end of its price range rather than at its deserved top end, proving the starting high concept to have been a costly gamble.
Finding the Right Price for Your Home
At Berkshire Hathaway HomeServices Spencer-Hughes Real Estate, we try hard to be candid. This strategy has cost us listing contracts as some sellers still believe they should list their properties with an agent willing to start at a price the seller thinks it is worth, not what the market is willing to pay. A recent comparison of results with a competing agency bears out this folly.
In the same period a competitor sold 11 listings totaling 8.5 million while we sold nine of our listings totaling 9.0 million. Theirs sold for only 79% of the original asking price and the average time on the market was 287 days. Ours sold for 91% of the original asking price and the average time on the market was 126 days. That is a dramatic difference. The moral of the above story is not that we are better sales people. The lesson is that the market is the master. You cannot beat the market! So choosing a listing agent because they tell you they can sell your property well above market, can be costly for you.
Arriving at the initial listing price is a complex process and a moving target. We will carefully research the current market for you, once you've decided to work with us. We will resist the temptation of giving you an unrealistic initial price target just to get your name on a listing contract. Our team approach is a big help as Spencer-Hughes agents candidly pool thoughts to make sure you receive the best strategic advice.