Why do over-priced homes often sell for less than market value?

Posted by Liliana Sorescu on Friday, August 29th, 2014 at 5:27pm.

Home sellers here in Vancouver are often tempted to list their homes at a price considerably over their agent's recommendation. They want to "test the market" and just see if there isn't someone out there who will love it enough to pay more than buyers have been paying for similar homes.
They say "We're not in a hurry, so let's just try this and if it doesn't work we can lower the price."
Here's why that's a poor idea…
When a new listing comes on the market it gets the most attention it will ever get in the first couple of weeks. Agents who are searching for homes for specific buyers eagerly check out each new offering in hopes of finding "the one." Buyers who are searching without an agent do the same.
If a home is too far over-priced, one of two things will happen. Either those agents and buyers will read the descriptions and decide not to view the home, or they'll make an appointment, look, and go away. Once in a while a brave buyer will submit an offer at market value, but most will simply move on.
After a few weeks the seller may decide to reduce the price, but the listing is no longer new so doesn't get much attention. And worse, buyers will look, see that it's been listed longer than most, and assume something is "wrong" with the house.  So they don't come to see it.
Those who really have to sell will keep lowering that price. Sometimes their agents will contact all the agents who brought buyers at the higher price, but quite often those buyers have already moved on and purchased some other house.
Eventually the house will be lowered to less than market value, be seen as a "bargain," and will sell.  
Those who really can wait will see their homes expire off the market unsold.
If you own a home in Vancouver and want to sell, offer it at fair market value.
If you'd like to know what I do to get my Vancouver home listings in front of the highest possible number of buyers, give me a call. I'll be glad to share my methods. 

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