Dropping Your Price...Too Late
If you start out with a high sales price, then drop it later -- your house is "old news." You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your house could take longer to sell.
Even if you do successfully sell at an above market price to an uninformed buyer, your buyer will need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won’t appraise. Your deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen.
Your house could go "back on the market."
Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.
Realtors Talk to Each Other
If you start out with a sales price that is too high, there is a high likelihood you interviewed other agents. They didn't get the listing, of course. They got "aced out" by someone telling you what you wanted to hear.
If your listing agent routinely engages in "buying" listings, he has probably aced out scores of other agents in the same way. Being human, Realtors talk to each other. If they don’t like your listing agent, not as many of them will be showing your home.
In short, you may have ended up with an agent who was good at selling you , but not good at selling your house . And you’re going to pay them a commission for it.
It is human nature for you to want the highest price for your home. However, when you choose the agent who promises what you want to hear, it often leads to stress and frustration. Most of the time, it will take you longer to sell your home. Possibly, you will end up selling at a lower price instead.
Or maybe as a result of reading this article, you will choose one of the "good" Realtors in the first place. They are out there, you know.
copyright 2000 by Terry Light and RealEstate ABC, revised 2002
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