Home > Home Selling > Seller's Myth: I Can Always Price It First, Then Lower Later

I hear this phrase fairly often, "I'll just list it at this price first. See what it does. If it does not sell by the time I need to move, then I'll just reduce the price"....

How many times have we heard Sellers say that? It sounds like they are in no pressure to sell at all. Or they feel that it gives them enough time to justify a "higher" than market price first, if they are no takers, then they could always lower it. Some **think they have all these months (3 - 4 months) to sell, for the "highest" price is something they can afford. While I can certainly understand this thought, I may not agree with this philosophy at all.

Unless you are in a Seller's market, most of us are experiencing some form of "Buyer's market". By definition, a Buyer's market is one that has more homes on the market for the available buyers. This translates to more properties, thus taking a longer time to sell. Ultimately, falling prices. So, how does a phrase such as above would can help in this Buyer's market? The honest truth: It does not.

In my experience of working in this current Buyer's market, almost all Buyers are not forgiving. If your property is somewhat "higher" than than the rest of the competition, they would not come back for a second look even after a new price adjustment (ie price reduction). This may be as sensitive as $5,000, let alone some properties that are priced $10,000-$20,000 more. The more important thing is to count the entire time (with the "wrong" price) as time-wasters for both the agent and the Sellers. Sure, showings during the first few weeks will go strong and the momentum and enthusiasm will be high, but very soon, reality will hit. And when it does, it hurts.

Another painful truth is to realize that the whole time the property has been "market", sad to say, Sellers can forget the time it has been on the market. The "real" clock really started clicking when the property was priced correctly. I know it hurts, but also do not say that "I have already reduced the price by $20,000"... Hmmm.... The truth is that it does not matter how much you ask until it is priced correctly. You probably should have priced it correctly the first time, then you may not need to reduce it at all. Don't start "counting" on your equity until you price it correctly - better yet, until you have a contract to see how much is net at closing. These are painful events that no agents want to see.

So, what is the lesson learnt? Price the property correctly the right time around. If you have an efficient agent partnering with you, you might want to take the advice. Your real estate agent representing you are in the same boat as you. They want to go to the same place you want to: the closing table. If a real estate agent can yield you a higher price, he or she would certainly want to do that. After all, the return would be a little higher too. However, testing the market is not a strategy in this unforgiving Buyer's market.

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