What’s the Big Deal About a High Price?
If the sellers’ price is too high, people will just offer less, right? Wrong. Pricing properly matters.
Pricing property too high can end up netting sellers less money than if they’d priced it right in the first place. First, there will be a smaller pool of buyers who’ll even look at overpriced properties. “We have such a large inventory that buyers want the best buy on the market,” says Kathy Wilhelm, senior vice president and sales associate at ERA American Realty of Northwest Florida Inc. in Crestview. “If the house is priced outside its true price range, it won’t even get a showing.”
Second, if buyers in that smaller pool even make an offer, it’ll be lower than if the property had been priced right in the first place. “Buyers compensate for problems with houses in the pricing. The longer a sign is out or a listing is on the MLS, the more likely buyers think something’s wrong with it,” says Wilhelm. “They’ll think they should offer less to compensate for that. They also think they should pay less because when they have to sell it, they might have the same problem selling it.”
What if sellers want to list too high with the expectation that they’ll lower the price if it doesn’t sell? That’s usually a bad idea, says Carla Cross, president of Carla Cross Seminars Inc. “Real estate doesn’t work like that,” she says. “It works like Macy’s sales. If clothing doesn’t sell, it goes on the sale rack and gets marked down and marked down and finally sells for less than it is worth. That’s how people respond to price issues.”