Every day, on the Sudbury MLS system, we see overpriced listings. The cause could be one of many reasons, so over the years I’ve kept track of a few… So here we go!
Often the seller has high expectations, and it’s usually tied to a property they saw listed for sale and they felt their property was similar. They think “so this must be the price”. However, listings are not what we use for appraisals; its sales. What did someone pay - now it's a comparable!
Sellers are afraid to leave money on the table. Sellers have a fear of under-pricing their property, when in fact an under-priced property is recognized right away and attracts more than one buyer, often creating a bidding scenario. When two or three buyers are attracted to your property, amazing things happen! Usually, one offer will stand out above the others because you’ve encouraged the real buyer to react.
Remember this - an unconditional offer trumps a conditional offer even if the conditional offer is for more money. If the unconditional offer is price at an acceptable amount, grab it and run. This is not a time to get greedy because a conditional offer is just that - conditional. The buyer has an out. Buyers, especially in bidding situations, often feel after securing the property that they paid too much and will look for any excuse to just walk away.
In real estate, after a failed offer, is it next to impossible to get the remaining parties back to the table.
Another cause of an over-priced listing and the most common is next... Sellers interview multiple agents, and the agents know they’re in a competition for the listing. Guess what - if it's a nice listing, agents will start bidding for the listing often inflating the price to over what the market is telling them. But they want that listing, and will worry about adjusting the price down the road. My experience tells me that in 75% of listing competitions, the sellers choose the highest price but for only one reason - it sounds nice, and all logic just went out the window. These over-priced properties usually linger on the market and deflate the seller's enthusiasm for their choice of agent and hopes of obtaining their price.
Another source of misinformation the sellers get is from “Bob”, the well-intentioned neighbor, who tells you your home is worth way more than you thought. Bob wants to increase the value of his home, so he did it by increasing yours.
Some folks rely on their tax assessment, but that’s not a totally reliable source of value. Homes that are over-assessed, these owners scream! Those that are under-assessed, these folks are mute.
Sellers who have over-priced property on the market, without fail, blame their agent for the fact that their property is not selling. Get the right price, and get it right from the get-go, and enjoy the sale of your property.
Until next time!
Chad Moore - Sales Representative
John E. Smith Realty Sudbury Limited Brokerage
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