1. Agents react. Real estate agents – yours and the buyers’ – may not want to waste time with a home that’s unlikely to sell. Though a higher price means a bigger commission, agents might figure they can move two or three homes in the time it would take to sell yours, earning more even if each offers a smaller commission than your property does.
2. Buyers react. Buyers who like your house but choose to pass on your property because of the price may find something else and close a deal before you drop your asking price to a level they’d accept.
3. You need that money. Even if you get your full asking price, the time it takes to get it may cause you to miss the second house you want to buy if yours takes too long to sell. You may have to settle for something that’s not as suitable. Even worse, you may end up spending more than you had planned, offsetting the premium you got on your sale.
Setting a proper sale price is both an art and a science. A key step is to shop carefully for an agent who can help you, looking for one who is very familiar with your community and comes with good references. Steer clear of dabblers who sell only a few homes a year. You want a pro who is on top of the market and will value a good reference from you.
Next, drive around to look at the “comparable” homes used to set your asking price, and look for others if necessary. If you’re on a hill, don’t use a comparison from a home down in the less-desirable floodplain. Make sure the house’s curb appeal matches yours. Keep in mind that a computer that spits out comparable sales isn’t likely to know that your home has a new kitchen and the others don’t.
Finally, keep an eye on the “traffic” – the number of potential buyers who come through your property. A good agent will have a sense of how many buyers are looking. If you not getting your share, it’s a sign you are reaching on price. If dropping your price is inevitable, it’s better to do it sooner rather than later.
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