The problem with setting your list price too low is obvious: you “leave money on the table.” But, the problems from setting a price too high are less so. Many sellers rationalize that “we can always lower the price,” but by then, the damage may be done. Here are some reasons why setting the right list price is possibly the single most important element of marketing your property: why you don’t want to OVER-price!
1. Short Appraisal: Even if your agent convinces a prospect to buy at your inflated price, the deal may go sour when the appraiser comes a’calling. Over 90% of buyers use some kind of financing, and that requires an independent mortgage appraiser, and the lender will only loan against the figure that appraiser produces.
2. Won’t Show: If the price is too high, you won’t be able to get prospects through the door to even look at the property, no matter what you have done to the interior.
3. Reputation: When a new listing hits the market, agents check it out against the needs of their clients. If your property gets a rep for being overpriced, getting the market’s attention later may take some extreme actions.
4. Helping the Competition: Your overpriced property will make your competitors’ properties look like real bargains, so you are actually helping your competitors’ properties sell FIRST!
5. Days On Market: The longer your house sits on the market, the more “Days On Market” show up on the MLS, and the longer it has to become “stigmatized.” Ever see a home or condo unit that seems to have been for sale forever? Did you wonder what might be wrong with it?
6. Negotiation Purgatory: The longer it’s on the market, the harder the buyers are going to negotiate.
7. Missed buyers: You will lose many buyers who are outside of your price point, but who are buyers looking in the price range in which your property will eventually sell. They’re off to buy your competitor’s property!
If you already have your unit listed for sale and have not had a lot of action on it, there is an opportunity to review your pricing strategy- we’re in low season right now and will be there through January. If you are considering selling your unit, be sure to consult with an agent who is familiar with your unique market and its current values in order to assist you with pricesetting… and no one knows the Plantation like Joe Savage and Mandoki Realty.
