Due to a change in real estate market conditions, there are a lot more sellers in comparison to buyers. Therefore, it seems like it’s about time to challenge the common myths of real estate.
The asking price of a property isn’t that important as it can always be lowered later.
Even though many home owners seem to believe this it is not true! If most buyers first viewed your house because of a newspaper ad, a magazine, the internet, brochures, or the sign in your front yard, the initial asking price probably would not make a difference. The house would always be “new” to those seeing it.
Most buyers do not come to your house due to various types of advertising. This is also not true! Of course, buyers call and investigate properties on an advertisement; they often LOOK at that house, but not always. Once they talk to an agent, they may discover it isn’t what they need or want at all. They are talking to an agent who knows the current market and will know of other property that does fit their needs.
Those are the properties that buyers look at, and this is how most buyers end up looking at your house, too. It’s because of other agents, not because of your advertising. It is very uncommon for someone to buy a house they saw in an advertisement. As a result, you need to get other agents interested in your property, and this is where your listing agent comes into play and why a good listing agent is extremely important. The listing agent gets buyer’s agents interested and looking at your home. Those agents have clients who called in on other properties.
Buyer’s agents are not influenced by advertising. They look at the needs of the client, where the client wants to live, location, condition, and other details of the property, not to forget most importantly price.
If your house is overpriced, agents are going to show similar homes that are priced more accordingly and are in their client’s best interests. Your listing will get overlooked. Agents pay considerably more attention to homes newly on the market. There are fewer new listings than current listings. It is easier to keep an eye out for what is new, compared to the extreme number of current listings.
New listings are on the “hot” sheet circulated in real estate offices. The MLS computer identifies new listings. Your listing agent may hire a service to distribute fliers to all the buyer’s agents. There are office previews and MLS tours to showcase new listings. A lot of attention is focused on what is new as opposed to what has been on the market for a number of months.
With agents looking at newly listed homes so assertively, a properly priced home gets attention. An overpriced home goes to the back of the file. Even if you are thinking to yourself that you’re willing to negotiate it probably won’t matter. Buyers aren’t thinking in advance about how much you are willing to negotiate. They are comparing your asking price to other asking prices. Plus, when your house is new on the market, you may not be willing to negotiate as much as you will later, once you’ve realized your error. Keep in mind that statistics show, quite often, the first offer is the best offer.
A price reduction later in the listing cycle often gets overlooked. It is just one of many listings, not one of a few new listings. As time passes, you could actually become desperate to sell because you’ve accepted a new job or because you have already bought a new home. That is a recipe for disaster, so you could end up selling for less than you would have, had the house been priced a little lower in the first place.
Agents are aware of this, however, many sellers still mistakenly believe they should “price it high” because they can lower the price later, if need be. That is not the best strategy, and will not benefit you in any way in the short or long run.