August 3rd, 2015 5:52 PM by Christopher Terry
The real estate market is picking up and more and more people are putting their homes on the market. Some homes are selling within weeks of being listed, while a similar home might suffer price cut after price cut and months on the market before finally being sold.
So why is one home selling faster than the other? The answer: it had the right price. Research has shown that homes that were originally listed too high experience a listing price reduction and sit on the market longer, ultimately selling for less than similar homes.
John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price.
He discovered that, “Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”
The “I’ll lower the price later” approach can paint a negative image in buyers’ minds. A buyer who see that a home has been on the market for a year and has lowered its price a couple of times immediately wonders why and attributes it to the house having problems. Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.”
But, if you price your home correctly, you could be the one with the leg up during negotiations. How? Well, the better the price, the more offers and competition. Allowing you to pick the best offer, which is sometimes even OVER asking price.
And because correctly priced homes sell fast you will have to spend less of your life working around open-houses and showings of your home. Ultimately, it’s a no brainer. You get a handpicked buyer, full asking price, and house that sells in a reasonable amount of time.
For more information about the importance of setting the right price visit http://www.ezhomesearch.net/pricingguidelines and to find out the right price for your home, give EZ Home Search Real Estate a call, and we’ll take the time to simply and effectively explain what is happening in the housing market and how it applies to your home.
Mariah Terry is passionate writer and blogger studying Journalism at Emerson College with a minor in Marketing. See her work at mariahterry.jimdo.com.