The Real Deal / Home sellers: Don't be stubborn on price
"No, I won't reduce my price. Someone can make me an offer."
Agents often hear these words from sellers whose properties are not generating much interest among potential buyers. These houses are priced too high.
It can be hard to convince a seller in this frame of mind otherwise. After all, holding firm on price and fielding all offers is a perfectly legitimate approach in other sales venues. It's just not the way it works when you're selling your house.
Have you ever seen local market statistics that show average sale prices at 95 percent of list? It's true. The vast majority of deals are made when properties are that close to market value -- either initially priced there or reduced to that level. The important, usually missing word when calculating list-to-sale ratio is "last" list price. When properties reduce close to market value, suddenly they get lots of buyer attention.
Today's buyers know more than ever before. By the time my buyers have been out three or four times, they can tell me what a fair deal is and what's not. If your property is perceived as fairly priced, it will attract solid offers -- sometimes more than one. If it's not, because you've declined to reduce your price, your house will sit.
Unfortunately, there are serious consequences of this decision. Know this -- the longer your house is on the market, the less you will get for it. By the time someone does make an offer on your overpriced house, it will usually be low, with limited upside negotiability. And generally the offer after that one will be worse.
Aggressive buyers target overpriced properties that have long market times. It's fun for some of them. And you will ultimately be the loser. My best advice to a seller who's reluctant to reduce the price is to think this through. Take your house of the market while you're thinking so you don't accumulate any more market time that will hurt you.
Evi Coghlan's "The Real Deal" appears every other Friday. She is a licensed real estate agent with the Riverside Avenue office of Coldwell Banker and a former marketing consultant to Fortune 100 companies. Evi may be reached at 203-247-6691, by emailing her at email@example.com, or visiting www.evicoghlan.com.