Empowering Professionals

The seller asked if they could list at a higher price now, and lower it later...

Overpriced listingHmmm...

Let's take a look at two different types of markets, and how this will affect the probability of the home selling if you go this route...

In an appreciating market

If a seller overprices their home in this type of market, it will eventually sell for that price.  As the market continues to heat up, and average prices in the area rise...  That overpriced home will soon be at the market value and will eventually be sold.  But know, that a good priced home in this market can go in multiple, if priced aggressive at the get go.  A good rule of thumb in this type of market, is the last sold becomes the floor for the next sale.

In a depreciating market

If a seller overprices their home in this type of market, it will sit and sit and sit.  An overpriced listing is what all the other homes that are for sale in the area use to get theirs sold.  They say, "Buy me, I am the same as that one, but priced so much less!"  As the market continues to drop, you will always be chasing it.  Every time you lower the price to try to catch up, your competition will follow suit and still use you're "overpriced/on the market a long time" listing to sell theirs and leave yours sitting...  You will then be chasing the market, and will have to make a large price cut UNDER the current lowered market value to get it sold.  In essence, settling for a price that was lower than the average price at the time you were ready to sell.  Most will tell you it will take a drop of 5-10% to get it viable again in the eyes of buyers.  Most activity for homes that are for sale happens in the first 2-3 weeks.  So even if you lower the price, many potential buyers have already seen your house and moved on, so that is why you have to really LOWER it at this stage.  A good rule of thumb in this type of market is the last sold home becomes the ceiling value for the next sale.  Price your home at the low end of all comps and a good place is in the bottom 33%.

What would you do if the seller wanted to overprice a home and wanted to hire you to sell it...

:)

Chris

 

Chris Alston

 

Home sales and purchasing specialist

Keller Williams Realty, Cupertino

19400 Stevens Creek Blvd, Suite #200

Cupertino, CA 95014

408-850-6955

408-850-6956 fax

calston@kw.com

www.LivePlaySiliconValley.com

 

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Comment balloon 37 commentsChris Alston • February 10 2011 12:33AM
The seller asked if they could list at a higher price now, and lower…
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