Many homeowners are inclined to start with a high asking price when selling their homes. They reason that they can always come down when no one responds. This is an erroneous and potentially dangerous assumption.
Everyone knows that the housing market is tough right now. A lot of inventory, a lot of competition and not too many buyers. This means that your house is competing with other homes. If they’re priced right and your house is priced right, they will win.
If buyers are talking to an agent, that agent knows the market. He knows the listings that are on the market. He also knows which listings are overpriced. And he’s not going to waste his time, and the buyer’s time, with looking at an overpriced house.
Maybe you’re mare than happy to negotiate. A lot of homeowners are. You’re hoping for an offer, so you can take a big amount off the price and still keep enough to get equity out of your house. But you will be hard pressed to get an offer. It will even be tough to get showings in this market. If you don’t have showings and you don’t have an offer, you can’t negotiate.
Let’s say that you’ve started with an asking price that is too high. Now, after 3 months of little activity, you’ve decided to come down. Buyers know notice your home, but they will wonder what is wrong with your house. Why has it been on the market for a couple of months at that price?
If they do find out that you’ve just lowered your price, they might draw the conclusion that you’re in a tight spot. They reason that you’re facing some kind of deadline and will give you a low ball offer, hoping to buy your home on the cheap.
There are many more reasons for starting out with a solid asking price. In this market, you shouldn’t even think about overpricing. It’s tough enough for well priced homes to sell, let alone overpriced homes.
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