Oct. 21, 2005: Price your Phoenix-area home right and it will sell
Why do so many home sellers fail to get top dollar for their houses?
Often the cause is that the homes were priced too high to begin with. Sellers grab for more money but end up with less.
But wait... doesn't it make sense to list your home at a price higher than the current market?
Unfortunately, no. Buyers and their Realtors will come armed with accurate price information. They'll know what homes like yours have sold for and what comparable homes are selling for now. If you price your home too high, not only will it not sell, it will continue not selling after the price is reduced.
Even when it's clear that a house should be priced at $300,000, it's common for sellers to say, "Why not try it at $325,000 to see what happens?"
The listing Realtor may be too weak to point out the unhappy consequences of pursuing such a plan.
So the home doesn't get buyer traffic. Buyers go to the appropriately priced properties. No offers come in. The sellers glare at the lister, who silently kicks himself for agreeing to price the house too high. Finally, the price is reduced to the actual market value of the home. But there is still no buyer traffic - the home has been listed for so long that it seems shopworn.
Nevertheless, the sellers do get offers - low-ball offers from discounters looking for a shopped-over bargain. Finally, they give in, letting the home go for much less than they would have gotten had they priced it right in the first place.
Why not start lower than the market price, hoping for higher bids?
Except in the kind of frenzied seller's market we had a few months ago, buyers are just going to assume that you or your Realtor doesn't know what your property is really worth.
But what if you have time to wait? Don't list your home until you need to sell it. No house profits from an extended time on market.
Your best strategy is to price your home to the market. You'll get the highest price you can reasonably expect in a timely fashion.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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