When a home is overpriced, the owner has two choices: reduce the asking price and enhance the appeal of the property to potential buyers, or hold out for a higher price without reducing the asking price and that is typically quite risky.
Below are some possible consequences of holding out.
A HIGHER SELLING PRICE:
Most buyers coming into a new area will enlist a professional Realtor® without cost to them, to acquaint themselves with local values and not pay more than the local market will bear. These relocating buyers are typically your best bet and it can be a huge mistake to let them pass you by as they typically have nothing to sell and are able and willing to purchase with no strings attached.
DRIFTING FROM SELLER’S TO BUYER’S MARKET:
It’s not uncommon for a property owner to decide not to reduce their asking price because they are in the midst of an active market with homes selling all around them. If they hold out too long, they can become the victim of a market that begins to slow and gradually drifts into a buyer’s market with less demand and lower prices. This drift has happened here recently as interest rates have risen and the hot market has cooled.
MISS THE IDEAL HOME:
Some sellers miss the opportunity to buy their dream home because it gets sold before they sell their present home. This occurs because the seller wants the sale price of their present home to cover the cost of the next one. This is almost always an unrealistic approach and is destined for failure.
MISS A FAVORABLE INTEREST RATE:
Interest rates are always in a state of flux. Many sellers who hold out for their asking price during a period of favorable rates find themselves later reluctantly selling during a time of higher rates, and ultimately sell for less anyway.
ADVICE: Your Realtor® normally wants you to get the highest possible price because they are typically paid a percentage of your sales price. Sometimes, however, their advice to reduce your asking price may be the best advice you could get.