Set the price

B - Leave Room to Negotiate: How important is it?

Why not ask a lot for your house. They can always make an offer.

Overpricing is the number one reason why homes that are listed languish on the market and why so many by-owners eventually list their home. Price your home so that it compares well with other homes in it's value range. 

Many owners like to set a really high asking price so that they can leave a lot of room to negotiate.  By-owner sellers are particularly guilty of this. They figure that the buyers can always make an offer, which is true, in theory. 

Most buyers, however, will simply not bid on an overpriced home because it doesn't compare well to other homes they are shown. Your home needs to be seen by the buyers who are looking at houses in the price range where yours should be.

When you set your price to leave yourself a lot of room to negotiate, you're appealing to the wrong crowd. You're attracting buyers who are looking at higher priced homes. Your home will not look as good in comparison to those homes.

The old concept of leaving yourself “room to negotiate” has given way to a generation of savvy buyers. They use the internet to educate themselves on home offerings and values.

You need an offer to start negotiations. Price your home so that it shown to your true buying audience and has a chance of attracting offers.

Also, some buyers won't make a bid for fear of alienating the owner with a low-ball offer. They'll wait for the price to be lowered– if they don't find another home in the meantime (and that’s a big “if”). 

          Example:

One homeowner was determined to sell his house on his own, and was convinced he had a great home worth $300,000. Well, he was half right. He did have a great home, but it wasn't worth nearly that much. The houses that sold for around this figure in his neighborhood either had newer kitchens, extra bedrooms, extra garage stalls–you get the picture.

So what happened? He got some showings, but, not surprisingly, the buyers just didn't think his home offered as much as the others they were seeing in the $300,000 range. At the same time, there were plenty of buyers looking at houses in the $260,000 and $270.000 range who would really have gotten excited about his house. But they never saw his home because it was priced above the price range they were looking in.