Lowering the Asking Price - Asking for Trouble Part III
When you start out with an over-priced asking price, then drop it later -- your house becomes sad "old news." You won't be able to experience the initial activity you would have had with a realistic price. Your house very well may take longer to sell.
But let's just say you've been successful selling at an inflated market price to an uninformed buyer. The buyers' mortgage lender will call for an appraisal. If comparable sales (which you were shown originally but rejected) for the last six months and the market conditions don't support your sales price, the house won’t appraise and your house falls out of escrow. You could chase the buyer, offering to renegotiate, but for him/her, the deal is tainted and they most likely will respond with an even lower than appraisal offer.
Your house could go "back on the market."
Either scenario (dropping the price or failed appraisal) means your house sits on the market month after month and it's harder to get a good offer. Buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.
Realtors talk to each other. And if your selling agent has "bought" your listing by telling you what you wanted to hear, they will know. This can mean two further problems for you: other Realtors may not want to "do business" with your selling agent because of his practices, and/or they may not want to do business with you because they worry you are inflexible and demanding and that negotiations might be unpleasant. After all, you've had to lower your price and you are not very happy about your experience.
So, when a Realtor backs up a proposed selling price with comparable sales, market conditions, etc., and gives you his/her professional and honest advice on how to price your home, it's best for you to listen to his/her professional advice. It will save you money and heartache!
But let's just say you've been successful selling at an inflated market price to an uninformed buyer. The buyers' mortgage lender will call for an appraisal. If comparable sales (which you were shown originally but rejected) for the last six months and the market conditions don't support your sales price, the house won’t appraise and your house falls out of escrow. You could chase the buyer, offering to renegotiate, but for him/her, the deal is tainted and they most likely will respond with an even lower than appraisal offer.
Your house could go "back on the market."
Either scenario (dropping the price or failed appraisal) means your house sits on the market month after month and it's harder to get a good offer. Buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.
Realtors talk to each other. And if your selling agent has "bought" your listing by telling you what you wanted to hear, they will know. This can mean two further problems for you: other Realtors may not want to "do business" with your selling agent because of his practices, and/or they may not want to do business with you because they worry you are inflexible and demanding and that negotiations might be unpleasant. After all, you've had to lower your price and you are not very happy about your experience.
So, when a Realtor backs up a proposed selling price with comparable sales, market conditions, etc., and gives you his/her professional and honest advice on how to price your home, it's best for you to listen to his/her professional advice. It will save you money and heartache!
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