For 6 years agents and homeowners suffered terribly when they’ve overpriced a home for sale. Some agents did not have the courage to give sellers the bad news and in some cases the sellers wouldn’t listen to reason, even if there was a mountain of proof.
With a huge glut of homes for sale and few buyers, there was so much competition at every price point that an overpriced home was getting few showings, if any, and wasn’t making it onto buyer’s followup lists. This meant the home would sit on the market much longer than it should and typically would sell for less than it would have if it was priced correctly to begin with.
As the housing market recovery enters its second year we find surging buyer demand and a dramatic decline in listing inventory leaving buyers with very few properties to choose from:
Inventory of homes for sale is now at 10 year lows and may go even lower this summer as buyer demand continues to outpace seller activity. For those sellers that are in the market, they are likely to see far more interest in their home than just a year ago. Now with such buyer competition, a seller who is slightly overpriced should still see healthy activity on their home and in some cases, may receive a higher offer than what the market was indicating before it was listed.
This should not be read as an endorsement of overpricing your home but for the first time in many years I’m comfortable with being a tad more aggressive. It is important to watch your competition and buyer activity closely and if you find you are more than just a little overpriced, act decisively to bring your home to the right price.