Starting out with too high of a listing price will add to the stress of selling your home.
Ideally, during the first few weeks, your home should be overflowing with activity. Listing agents will market and promote your home to other agents who are working with homebuyers, increasing your personal sales force.
If you have overpriced, chances are fewer agents will promote your home to their clients. As REALTORS®, it is their job to know the market demand and fair market value of a home. If your home was dramatically priced above market value, you will essentially be wasting your time.
Dropping Your Price Too Late
Your house could take longer to sell if you start with a high list price and then drop it later. By this point, your house has become “old news” and has lost the chance of overflowing activity that you would have received with a realistic price.
Even if you were to sell your home at an above market price to an uninformed buyer, that buyer will likely need a mortgage. Their lender may require an appraisal. If comparable sales and current market conditions do not support your sales price, the house won’t appraise and the deal will then fall apart.
If your home sits on the market a while, it is harder to get a good offer. Overpricing your home in the beginning, then dropping the price may look like you are desperate to sell and potential buyers may make lower offers. You could actually end up settling for a lower price than you would have normally received.
Of course, you want to receive the highest price for your home. If you start out with a list price that is too high, you likely interviewed other agents who didn’t get the listing.
If your listing agent engages in “buying” listings if your home didn’t sell in x number of days on the market, chances are they probably pushed through other agents to tell you what you want to hear. Now you’ve ended up with an agent who was good at selling you, but not good at selling your home and got paid the commission for it.
It’s tempting to choose the agent who tells you exactly what you want to hear. Instead, look for honest advice agents will give. This way you won’t be frustrated about why your house didn’t sell close enough to the price you had listed it for.