Pricing your home right. From the start

One common issue with many listings in the current is that they are overpriced. Not only will an over-priced listing take longer to sell (if it does sell at all), it may also lead to the seller receiving less money in the end. Let me explain.

As a home owner and seller, you want to get the most money out of your home when you sell. Typically, home owners will want to ask more than they know their house is worth just in case somebody wants to buy it at the inflated price. This never happens. Buyers are smart especially with the help of their Realtor.

When a house is first listed, their is a certain level of excitement in the new listing. All the Realtors in the area have clients that are currently looking for houses and the new listing might be the one they buy. If this house is overpriced in the initial offering, the buyer may discount it as a possibility.

Now you may think that the buyer may make an offer at the price that makes sense to them, the fact is that if there are other listings that are priced accurately at the same point in time, the buyer will more likely put an offer on one of those houses because they will believe that they will get a better price on the lower priced listings.

So the over priced listing sits on the market for a month or so. The seller, and the realtor decide its now time for a price reduction. At the reduced price the seller is confident that it will sell. However, now that it is an old listing it has lost some of its sparkle. The other Realtors, have moved it down a notch on their radar. Subsequently, this listings stays on the market for another month or two leading to yet another price drop.

The asking price is now listed just above the floor price that the seller is willing to accept. An offer comes in much lower because the listing has been on the market for so long. The seller is now forced to choose...take the lower price or risk leaving it on the market for another few months.

If this listing had been priced correctly in the first place. There would have been a much higher level of excitement and urgency from one or multiple buyers. In fact, depending on the market, their may be multiple-competing offers. The seller would end up with a higher price in the end.

The moral of this story...Listen to your Realtor, study the comparable sales (not the comparable listings)and list your house competitively right from the start and you will make more money from your sale.