Sellers discover they could have profited most by initially offering their property at a price just slightly above the property's "fair market value".
This strategy provides the maximum market exposure to potential buyers. If a
property is overpriced, it is really in a "test market" stage, or
testing period. In our market place, the actual marketing period does not begin
until the home is priced within 3% of its fair market value.
If a property starts out being overpriced, knowledgeable buyers will look to compare, but move on to other homes, which they perceive as a better value. Additionally, showing brokers who remember a property as being overpriced, frequently eliminate it from their showing list with future buyers, even if the price is reduced. Brokers remember the home negatively and simply eliminate it since there are so many other properties for their clients to consider.
Sellers of overpriced properties frequently find that lowering the price to a fair market value range does not generate an acceptable offer quick enough for their limited marketing time remaining. When this happens, sellers are frequently forced to offer their home below fair market value in order to generate a timely offer. Sellers then end up with less money than they would have if their home were priced correctly in the beginning.
Today, intelligent buyers are often represented by a professional REALTOR®
acting under a buyer agency agreement. The agent has a legal obligation to the
buyer, not only to thoroughly shop the available housing inventory, but also
to advise the client of recent comparable home sales. Since buyers are so well
informed today, we find properties must be priced within two to three percent
of their fair market value before a buyer will even write an offer.
In Summary:
Fairly priced properties continue to sell. Our market now offers more properties
than there are available buyers to acquire that inventory. Overpriced homes
remain on the market month after month. New listings also continue to be added
each month to replace sold inventory.
