Shouldn’t I list a little high?   

I can always come down later….

This is a standard Seller-consideration.  And yes, you CAN list a little high…. 

But what are the possible consequences?  Is this smart?

Buyers today have access to information on all active listings on the market.  They also have access to closed sales data.  Most Buyers will start their home-search by going to the Internet and looking at homes for sale for several months prior to actually getting in the car with their Realtor to make a selection.   By the time they are Lender pre-approved and ready to start seriously shopping, they KNOW THE MARKET. 

In most market climates you will find that Buyers shop by comparison.  And while they will have usually pre-determined the general area where they want to live, they will still want to see EVERYTHING on the market EVERYWHERE (oh yes, from Avondale to Apache Junction and from Cave Creek to Maricopa City) prior to writing an offer in order to be sure they have not missed a “better house” that could work for them.   Many Buyers look at 30-80 properties prior to writing an offer. 

If your property is priced even a LITTLE too high, it will be shown and seen for comparison purposes, and the Buyer’s offer will be written on another listing that is priced “right on”, and thus in the Buyer’s eyes, a better value than yours.   And while your property remains unsold, new listings will continue to appear as competition. 

Additional consideration:  The first few weeks your property is on the market is the time of marketing excitement.  A new listing!  And there are Buyers out there who have been “looking” but who have not yet made their selection.  They already have a comparison base.  If your property is “right priced”, or -- in the case of a market where there is an over supply of listings, “slightly under priced”, there is a good chance that at least one, maybe more than one, of these Buyers will be shown your property shortly after the listing becomes active – giving you a chance of receiving one or MORE offers, with potential for a higher price than you would receive at a later date.   

Another part of this consideration:  if your property is priced “a little high”, the Buyers in the price range that your home should really be in may never see your home because they don’t qualify to purchase at your list price.  Most Buyers purchase at the TOP of their financial qualification, and instruct their Buyer Agents to not show them property priced over that dollar amount.

Finally, if your home does not sell because of a price that is too high, at some point it will have to be price-reduced.  When that time comes, because it was marketed too high for too long, the price will have to be dropped to BELOW what it SHOULD have sold for in order to attract a Buyer.

So how do you set a price to sell that nets the most dollars?

In a market climate that is fairly level – the supply of listings and Buyer demand are about equal and there is no abnormal price activity– emphasis should be on comparing pending and closed sales, then making sure your list price is no higher than the middle to low range of similar active listings competition.

In a market climate that is tilted towards favoring Sellers – very limited supply of listings coupled with strong Buyer demand and increasing prices– emphasis should be on comparing active listing prices, then pending sales, and selecting a list price that is at the top of the two ranges.

In a market climate that is tilted towards favoring Buyers – an oversupply of listings coupled with limited Buyer demand and decreasing prices – emphasis should be on comparing pending sale prices, then closed sales, and selecting a list price that is at the low end of the two ranges and below similar active listings. 

But shouldn’t I go with the office / Agent that says they will list my home for the highest price?

Whoops!  Red flag!!

Unfortunately, there are Agents who will “bid” for your listing.  The practice is also known as “buying a listing”.  The Seller gets excited about being told they can get a higher price, then when the property hasn’t sold for several months, the Agent reviews the figures & the Seller has to drop the price BELOW where it SHOULD have sold earlier.  Not good.  Both dollars and time lost.   

Remember, AGENTS DON’T SET MARKET VALUE.  The price of your home is what a willing Buyer will pay, substantiated by the appraisal of the Buyer’s Lender. 

List with an experienced professional Agent who will bring you the figures so YOU can make a careful pricing decision, who will thoroughly market your property,  who will personally be communications-reachable and who will be available to work with you and handle the details of your transaction after a qualified Buyer is found.

Results that Count…… 

Liz Pickett, ABR, CRS, GRI

Broker-Associate & Certified Relocation Specialist

Coldwell Banker Residential Brokerage