Everyone wants to get the top dollar for their home, but setting a high price and expecting potential buyers to haggle you down to a reasonable one is a sure-fire way to scare them off before they even contact you.
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MSN Money Central highlights the pitfalls of overpricing with the expectation of potential buyers negotiating you down to a reasonable price:
Experts agree that starting high with the idea that you can always drop it later is a costly mistake. Pricing doesn't just determine how much money you stand to make — it also dictates whether buyers even give your home a serious look.
With so many competing properties for sale, yours has to pop out immediately as a good value or buyers will move on, unlikely to return. You get one first shot at your home's debut, and it's easy to blow it.
"The amount of traffic that a listing gets in its first week is five to seven times what it gets in its ensuing weeks," says Glenn Kelman, the CEO of Redfin, an online brokerage and listings site. "Let's say you lower the price (later). No one will notice. You really are broadcasting that discount to a much smaller audience of buyers and will have the perception it is damaged goods."
It's a double whammy; not only does a high opening price scare off a huge number of potential buyers, but the ones who keep an eye on the house see you as desperately trying to unload an unfit house when you drop the price to the actual market value. Worse yet, if you overvalue your house and drop the price, the buyers that stuck around will become more aggressive and expect you to take the hatchet to the price once again.
Check out the full article for more insights and great tips on pricing your home based on its real value, and not the hopeful and sentimental one you attach to it. Have your own experience selling homes? Let's hear your tips and tricks in the comments.