Shouldn't we overprice my home at the beginning so that we can create a bidding war?
If you’re like most people that I meet with, you think that the longer your home stays on the market, the more offers will come in, creating competition around your home, resulting in the highest offer possible.
It’s basically like an auction, right? Wrong. The longer your home stays on the market, the less likely it will sell for asking price (or above).
Why? Well, if you go to an auction, the bidding price is set, and offers go up as time goes on. But your home isn’t a rare piece of art. Amongst a sea of other homes for sale, yours will quickly become stale and buyers will wonder why it hasn’t sold yet.
According to a study by Zillow, homes that were on the market for about two months sold at 5% below the asking price, and homes that were on the market for the longest amount of time (eleven months on average) sold at 12% below the list price.
Meanwhile, the homes that ended up selling at or above the listing price sold right away.
Having an accurate, and more importantly, realistic pricing strategy from the start is how your home will be sold for the most money and quickly. You don’t want to price your home too low and neither do I. But you also don’t want to let it sit on the market for too long.