We recently met with a real estate agent to discuss selling our home. We were surprised at the price she suggested as we were thinking we could get at least $20,000 more. Shouldn’t we begin high with a price and go down if we have to?
Your logic seems to make sense and I hear it frequently from sellers – “Let’s begin high and then we have room to negotiate down.” It’s understandable as well because, of course, you want to get as much as you can for your home.
There are a few problems with this thinking, however. In our digital world, sold prices are common knowledge to all. Buyers know what homes are selling for. They know that your neighbor’s property, similar to yours, just sold for $280,000 in the spring. So why would they pay $300,000 for yours?
Most buyers do not want to offer substantially less for a home, even if they love it or can afford it. Instead of offering less, they will usually move on to another home which they feel is priced realistically.
Another factor is the appraisal most buyers will need in order to get a mortgage. Even if you get a buyer who is convinced your home is worth more, if the appraiser (who has to use sold prices to determine the value of your home) decides it’s not worth that much, you may need to come down anyway so your buyer can get financing.
Trusting your agent to price your home appropriately is only the first step in selling it. You are also hiring her to help you prepare it to sell, market it well and guide you through the process to settlement.