Most Realtors with more than a few months in the business have heard this before from a prospective seller. “We want to test the market”. which means we want to list our house at an artificially high price and just see if anyone will pay it. Here is my list of reasons why this is a bad idea.
Reason number 1.
Today’s buyers have zero tolerance for artificially high prices. Sure, you hear lots of stories about herds of buyers clamoring to buy a home with multiple offers and all over the asking price. In fact, with every one of our listings sold this year, we had many offers with most over the asking price.
But, and you knew there was a ‘but’ coming, didn’t you? Today’s buyers are very savvy, especially the ones that have been in the market for a few weeks or months. They know that there will come a day of reckoning down the road when they will be the sellers. They do not want to pay twice what a property is worth and then either get stuck not being able to sell or have to take a significant loss to sell.
Reason number 2
Most sales involving a lender have to appraise for the sales price. In fact, we tell our sellers that we often have to sell their house twice, once to the buyers and again to the bank’s appraiser. Even if you are lucky enough to find someone willing to pay your inflated price, it still won’t sell unless they’re paying cash.
Reason number 3
Seasoned agents won’t show overpriced listings to their buyers. They know the market too and don’t want to waste their time showing homes that are not a good value for their buyer clients and may not appraise for the loan even if the buyer is willing to pay the inflated price.
Reason number 4,
This probably should be reason number 1. There is a “golden window of opportunity” for a new listing, and that’s generally the first couple of weeks on the market. A well-priced listing in reasonably good condition will often sell for a high price during this time frame.
If you miss this golden opportunity, your listing may set on the market for weeks or even months, and statistically, you’re liable to end up with a much lower price when you sell than if you had priced it correctly, to begin with.
Reason number 5.
The COVID pandemic has changed things. Although it’s loosening up some as the pandemic trends down in some areas (New Hampshire is doing well), many areas still have severe restrictions on the way you can sell real estate. Some states still allow no open houses, no in-person showings, or a limit on how many buyers can tour the property at one time.
In the New Hampshire real estate market and southern Maine areas where we practice real estate, the market is still red hot with well-priced listings flying off the shelves in days, if not hours. However, there are some overpriced listings still setting and would likely to set until the sellers come to grips with reality and lower the price. Even then, they’re likely to get a much lower price than if they had been priced correctly, to begin with.
Are you thinking of selling your house? Ann and I would love to talk with you and show you how our “Virtual Home Selling System” can get your house sold safely, quickly, and for a great price. Give us a call on our direct number 603-436-1221, and let’s talk.