A REMINDER FOR THE HOME SELLER

It's easy to drink the Kool Aid, and think that your house can be sold for whatever you want it to be...in other words, testing the market beyond its capabilities.  This can be a very good way for the exact opposite to happen and actually get less for your home and have it take a lot longer to do so.  This market does favor the seller.  But it favors the "fair" seller.  John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business, actually did research on the cost of both time and money to a seller who priced high at the beginning of their listing period and then lowered their price.  Knight states, "Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price.  Also, the longer the home remains on the market, the lower its ultimate selling price."  There are various reasons for this phenomena.  Firstly, buyers doubt the motivation of the seller; thinking they don't really wish to sell, they lowball.  Or, they think there is something "wrong" with the property, because it's been on the market so long and they lowball.  Finally, they may recognize that the seller has built in "negotiation room" into their price and so the buyers give them more than what they bargained for, which is a lowball offer.  And since the property was overpriced, there probably are not competing offers, which would force the buyer to make a better offer.  That only happens when a property is priced correctly, drawing many buyers to it.