There’s an old saying in the countryside that imparts sage wisdom for sellers:
“Pigs get fed. Hogs get slaughtered.”
They’re paying full price or driving them up with multiple bids. Pigs get fed. On the other hand, sellers aggressively pushing their prices beyond reason are being passed over, initially receiving no offers, and eventually selling for less than they could have if they had priced to attract buyers in the beginning. Hogs get slaughtered.
They avail themselves of the numerous resources on the web to see the sold comps in the neighborhoods that interested them and tour properties there. And they are jaded. Sellers consistently seem to be asking buyers to jump up to prices above what has recently sold, constantly pushing what the market might bear.
In our current market of very limited numbers of homes for sale, if priced properly, your home has the greatest chance of selling for full price or more in the first 10 days on the market. I have the metrics graphically illustrating this effect. That price will attract buyers to make higher offers sooner -- possibly competing offers -- gaining you the highest possible price.
When buyers enter a property that is priced at the market value for its location and condition, they get excited. Not every buyer will like the floor plan, but those who have been waiting for more properties to hit the market will be motivated to act quickly before someone else does.
Many sellers believe they will receive offers below their listed price, and so should add some padding to the market value. In some markets in California, it is a common practice to purposefully under price property. In the resulting multiple bid process, the highest offer is, by definition, the market value for that property at that time. Said another way, in a seller’s market, there are few risks in under pricing. The risks to a seller in a hot market are in overpricing.
Back to those really smart buyers and that data showing the success of sellers who have priced intelligently. The data graphically demonstrates that in all but the highest price ranges, if a home has not gone under contract within 10 or so days of listing, the odds are very high that they will receive less than the listed price.
Fascinatingly, in a hot market if a property is over-priced, most buyers won’t even make a lower offer. They just move on. Subsequent buyers enter the property searching for why it hasn’t sold, a very poor attitude indeed.
The market analytics clearly show that properties that did not find a buyer within a critical period likely will never get the price they could have if the property had been priced at the indicated market value in the first place.