Ask any agent and they’ll tell you at least a few stories about sellers who insisted on pricing their property at an unreasonably high price and actually believed the property would sell. Of course, given the right location and attributes, it’s likely some of them even got their price, but a large majority of these cases end up in full-term listing periods and many failed negotiations.
As if a deal that fell through isn’t enough, now the seller and listing agent both have to deal with their property’s reputation being a bit tarnished. When I see an overpriced property on the market for months – for example – I’m almost unconsciously skipping over it as a possible fit for a client simply because the price throws me off.
Furthermore, it literally reduces the chances of your property getting the exposure it deserves! If I’m an active buyer looking for 10 unit properties in Glendale, and I know that most buildings that size trade in a certain range of price, I’m probably going to search the MLS or LoopNet within my criteria. So, what essentially happens is that overpriced 10 unit building doesn’t show up in my search results, so I never see it.
Trulia’s Michael Corbett published a blog post in January 2012 titled, “Pricing Matters: Using List vs. Sale Price To Stay A Step Ahead“. Michael explains that pricing your property too high (or low) can eventually turn your real estate into a “dead listing” (LOVE that term!).
While most agents (at least locally) would do anything to keep a listing even if it’s overpriced, it’s important to know the right and wrong ways to expose your name and/or property.
Sure, a few people do get lucky, but pricing according to realistic market prices is your clients’ best tool to a fast and profitable sale. The former approach will cause you to miss any opportunity of attracting multiple offers. It will also prolong the time it takes to sell and, eat up value time on the real estate market.