As most of you know, we are now in a "buyers market". That means there are more sellers and homes for sale than there are buyers to purchase them. For this reason, buyers can be choosy and do not have to settle for the first home they see.
For years I have tried to convince my sellers that it is better to price their homes just below the competition in order to get them sold within a reasonable amount of time. However, too often they insist that their home is so "special" that there is no way that they will price it under any of their neighbors. Unfortunately their opinions are seldom objective and they are not seeing their homes as potential buyers view them. Many say they want to price it higher so they have negotiating room. Too often the price repels buyers and the sellers end up never getting any offers to negotiate. Their home just sits, and sits, and sits, month, after month, after month. Sometimes year after year.
I read a recent survey by an appraiser. He found that those sellers who priced their homes higher than the competition so they "would have room to negotiate" actually ending up netting less profit than their neighbors who undercut the competion. The higher priced homes spent more time on the market and made smaller profits for their owners. He found out that buyers were immediately turned off by the higher prices and concentrated on the lower priced homes. Since many buyers today are afraid that prices may continue to fall, they are much more attracted to homes that are priced lower than other similar homes.
Think about it this way. Say you have 10 homes in your subdivision that are similar to yours (in some subdivisions there are 30 or more) that are for sale at the same time as yours. Their prices range from $200,000 to $230,000. You think yours is better and decide to price your home at $230,000+. Where do you think the buyers are going to start???? Most, if not all, will start with the lowest price and work their way up through the available inventory. That means that there is a very good chance that they will find something they like long before they get to your "special" home. In all likelihood, your home will not even get a visit by them. So the cheaper house sells. The price is lower, so those owners made less than you will. What suckers, right?? Probably not.
As your home spends more and more time on the market as the lower priced homes sell, the housing market will probably drop more and your home will be worth less and less. The banks' appraisers will make you and buyers all too aware of this. Not only that, it will become what many real estate professionals refer to as "stale". In the meantime, you are paying taxes, insurance, mortgage payments, homeowner fees, etc. If and when you finally sell your home, it is very likely that you will net less than your neighbor who sold his home a year earlier because he priced his home just under the competition. Something to think about before you overprice your home.
For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: firstname.lastname@example.org
I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com
John Elwell - REALTOR
Bill Nye Realty, Inc.
Licensed in Florida