In today’s Bowie Estate, San Mateo market, where demand is outpacing supply, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.
There is no “later.”
Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that Bowie Estate homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.
John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Price published in Real Estate Economics revealed:
“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.”
Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.
Don’t build “negotiation room” into the price.
Many sellers say that they want to price their Bowie Estate home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.
Not sure about this? Think of it this way: when a buyer is looking for a home online, they put in their desired price range. If you are looking to sell your house for $900,000, but lists it at $925,000 to build in “negotiation room,” any potential buyers that search in the $850k-$900k range won’t even know your house is for sale, let alone come see it!
A better strategy would be to price it properly from the beginning with the hope – not guarantee – in bringing multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house.
Look at it this way: if you only receive one offer, there’s no competition and no reason for overbidding. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?
The Price is Right
Great pricing comes down to truly understanding the real estate dynamics in Bowie Estate. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home. You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.
Bowie Estate San Mateo Homes For Sale
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