You've decided it's time to move. Your house is too small, the children have grown, you're getting divorced, relocating for business or are going to downsize.
Whatever the reason, a major key to selling your home within a good amount of time can very well be the price tag you hang on it — regardless of whether you're in a so-called buyer's or a seller's market, and whether you use an agent or sell it yourself.
Across the country, the real estate market is slowing, and the news media is daily reporting on the decline in housing sales and prices. Often, this creates fear among potential buyers, holding them back as they wait to see just how low prices will go.
Many factors go into selling a home. Correctly, setting the asking price is arguably the most important step in the process. Homes that are overpriced have trouble selling; they scare away potential buyers.
Sellers are always looking for the highest price for their home. That's why, of course, they want to start at the highest point — maybe even asking a higher price than what they really believe they can get. We've all heard the stories that the Smith's next door got $X for their house last summer, but ours is much nicer and worth a good deal more.
In a seller's market, they may have been able to get top dollar, but those days are over. We are in a full-blown buyer's market; the tables have turned. So what most sellers do traditionally is start high, and then continue readjusting their price downward, trying to find a number that their home will be worth.
Even today, some sellers think that dropping the price sounds like an acceptable strategy. But they could be wrong.
Here's the problem: Adjusting your price may come too late, and result in less overall gain than if the home had been priced correctly from the beginning.
Remember, the majority of buyers use agents to assist them with purchasing property. These professionals work to help buyers find a home that's right for them. If their buyers are interested in a particular home and it's priced too high — based on comparable properties sold in the area — then the agents will find their clients similar, more reasonably priced homes to view in the same area.
As a seller's over-priced property continues to sit on the market, the listing loses its newness, its freshness. There are typically fewer new listings than existing listings in a buyer's market.
Agents pay a great deal of attention to what's new on the market. Homes that are priced correctly generate attention, activity and a sale; overpriced homes, on the other hand, sit for long periods, are passed over, and ultimately result in price reductions.
If a seller has an overpriced home on the market and then chooses to drop the price, it will often go overlooked. People tend to grow wary of it. Because it's not a new listing, it will need a lot more attention to get agents and buyers to notice that this same home is now being offered for less.
Flyers, e-mail and advertisements all have the challenge of enticing buyers and agents who wouldn't give it a look at the higher price to come see it now. It's not an impossible battle, but again, the listing is no longer new, and therefore may be less appealing, even with the price reduction.
And the longer an overpriced home sits on the market, the more stress the seller begins to feel.
If the seller has already purchased another home, has divorced, must move elsewhere for a job relocation or has undergone some other change in financial ability, then suddenly, the "desperate seller" syndrome sets in, and lowball offers might have to be accepted due to these new fiscal circumstances.
Obviously, neither agent nor seller wants that!
Andrew Lasner is Realtor and a senior real estate specialist at Keller Williams Preferred in Newtown. He can be reached at 215-860-0800 or e-mailed at: Andrew1 @comcast.net.