I get this question all the time. A home seller asks, ‘Does it really hurt to try it out a few thousand dollars higher? We can always come down later, and we need room to negotiate’.
Ouch! Does it ever hurt. It hurts on several levels, most of which end up affecting your bottom line. First, you are taking a chance on making your home ‘invisible’ to the potential perfect buyer. Think about it. One of the first criteria you would search by in a given area, or have your Realtor® search for you by is…drum roll please…a price range. If your ‘test’ price is outside of that range, you won’t even show up on the buyer’s radar as being for sale. There are plenty of other homes in the price range to put on their list and go to see. They don’t see, they don’t buy. Guaranteed.
Second, you are helping sell the competition. What? When you do get a showing, it will be to make the other house down the street appear an even better deal compared to your overpriced home. There is enough competition in the Austin market already. Look at it this way – if you went to see two houses, both as similar as can be, similar floor plan, similar curb appeal, similar condition, and one is $10,000 more than the other? Is there a secret basement? Do they have the titanium galvanized vulcanized nails? No. So why? This is a test that results in a failing grade every time. It’s just not sane to help sell the neighbor’s house, is it? As an extra bonus, your willing-to-list-an-overpriced-home agent is getting lots of calls and appointments from his pretty sign in your front yard. His new appointments won’t buy your home, because it’s not priced in the market, but they will buy something else from your agent. That’s the dirty little secret about agents who take overpriced listings as a way of making a living. Not good.
And third, you will inevitably take less down the road when it does eventually sell, or you might watch your listing and your plans expire in exasperation without a buyer. Experience shows us that a) after 10-12 showings you should get an offer on your home and b) the first 30 days of a listing are the most crucial, the most active with regard to showings and interest. It’s NEW on the market, it’s EXCITING and agents want to show their clients the newest and the best homes that pop up. As time goes by, your showings drop off and stop. You are competing with the NEW on market homes every day that tick tocks by. Every week that passes sees your resolve wither; you don’t feel like leaving the classical music playing for showings anymore, if you have any…you don’t feel like tidying up every day for no-one to come by and see your home, so you stop…when a buyer does come through, your home is a little dusty has lost the initial pizzazz and seems ‘stale’ compared to the NEW listings, with the piles of agent cards in the entryway from the showing they got and you didn’t.
When you finally get an offer, you take it. You are weary of the battle. It’s not what you wanted. It’s lower than you said you would ever ever accept. Worse yet, no offer comes and your listing expires, you are no longer even for sale, just wishing you had done something differently. But what? Now you know.
Let’s recap the top three reasons NOT to ‘test’ the home market at YOUR price:
- Won’t show in searches for appropriate buyers
- Helping sell the competition
- Sell for less, or not at all
Those are pretty powerful reasons. Don’t do it. Yes you can always take less down the road. In fact, it’s a guarantee. Fight the temptation, listen to your Realtor who wants to price your home IN the market to get maximum showings and exposure and MULTIPLE offers to create urgency and competition FOR your home and to get you the highest price possible. And that’s what you want, isn’t it?
Posted by Tim Tole, South & Southwest Austin Realtor®. Specializing in listing and selling residential and investment properties. 512-297-8534
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