The more things change, the more they remain the same, and you know it to be true -
Price a house for sale correctly - not too high, not with "Negotiating Room" - and it will sell faster, and for a better price, than if you "Tested The Waters" too high!
Have you ever run into the rare situation where a home seller feels that THEIR HOUSE is better than any other house on the market? You'd be surprised - we here this in Chicago all the time!
Back in the Old Days - let's say, 2005 - pricing a property a little high might have increased the time necessary to generate a Contract for Sale from, say, a couple of weeks, to, perhaps, a month or so. Market prices in many Chicago Neighborhoods and Suburbs often increased on a monthly basis. Often times, even those priced a little high just needed a slight price adjustment to make them quickly saleable.
But now, here in the City of Chicago and most suburbs, pricing a home too high can actually add considerable market time, and may actually reduce its eventual selling price!
James R. Knight, a Real Estate Professor at The University of The Pacific in California, cited a late-1990's survey out of Stockton CA, in the northern part of the state. It indicated that homes with repeated price reductions took longer to sell, on average.
Once these too-high homes did go Contract Pending, and evenutally sold, the average sales price was 9% less than homes priced right from the start. Knight continued, "This was during a time when the market was stable; I suspect there would be bigger drops now."
Here in Chicago, an agent from one of the big Downtown Chicago Condo Brokerage Companies explains the web, and its "Saved Home Search" function, similar to the one found on our Dean's Team Web Center, feeds new listings in a buyer's price range on a regular basis every day via email. Overpriced homes are out of place, and easily spotted - or they are completely missed by prospective buyers because these homes are out of the buyer's target price range.
Indeed, homes overpriced often drive traffic to homes in the neighborhood priced correctly. Prospective buyers often schedule showings on these pricey places, and then buy a home more market-priced, as they see no additional value in the home priced over-market.
Check out our post today @ BlogChicagoHomes.com for more info, as well as a link to Marilyn Kennedy Melia's article in last Sunday's Chicago Tribune.
DEAN & DEAN'S TEAM CHICAGO