This time last year, buyers were tripping over each other trying to beat out the competition for a limited number of listings. It really didn’t matter if the house was priced accurately. The offers just seemed to roll in. The listing agent’s primary job, often became advising the seller on what terms they could pick out of the multiple offers so that they got the best deal possible.
Markets change. Portland’s real estate market hasn’t tanked like it has elsewhere but now sellers are needing to compete for buyers and that starts with accurately pricing a home. That’s something that zillow and other nonhuman resources can’t do at this time. Overpricing a home is the death of selling it. It is hard to get past the old days where pricing was done by looking at recent comps, adding a little, then adding some more. Odds were that the offers would roll in.
Overpricing in a market that is more tilted in the buyer’s favor risks the following:
1) Buyers never look at the home.
2) The buyers that do look think that it is overpriced and never look again, even after price reductions. They emotionally move on.
3) By the time price reductions bring the price down to what the market would have accepted, the listing is stale.
4) The price reductions may go straight below what the home would have sold for if it had been listed lower in the first place. Listings are best the first few weeks when the listing is fresh to everyone, not just new buyers entering the pool.
5) Price reductions show in the listing history. Enough reductions may make the buyer think they are desperate.
Just because a listing agent recommends a high price that sounds good doesn’t mean they can get it sold. Where the lowest bid for work performed isn’t always the best bid, the highest suggested listing price isn’t necessarily the right price for the home.