When you REALLY know a market, it's pretty apparent when something is badly wrong with a home's asking price.
One of two things is likely to happen:
1. Buyers don't show up at all. No showings, no calls....nothing but the sound of crickets chirping.
2. Buyers show up and one of them may even write an offer, but not one the seller likes at all because it's so far below the asking price.
Now the seller might be thinking how can we be overpriced, we're priced just like the other homes around us?!!!
And what we've seen happen is it all starts with a shortage of homes for sale in a community. That gets interpreted as "We can ask for more since we're the ONLY home for sale". And while it's true you might be able to get a bit more, it's possible to overshoot the market demand.
So House 1 goes on the market at an inflated price. Then along comes House #2, they look at House #1 and target a similar price. They may decide to go even higher because "we've got granite counters and they don't". So now you've got TWO homes on the market that are both overpriced.
Now enter House #3 and they're the ones that can make things interesting. #3 may decide they REALLY want to sell so they undercut the other two, so they price where they REALLY should be priced, and they get sold.
OR #3 can decide they want as much as #1 and #2 so now you've got an entire neighborhood of overpriced homes!
Now if all three have overshot the market, they're each looking at their competition and figure they can't be overpriced because they're priced just like everyone else!! And they MAY hold tight for a bit because "we're not giving it away!".
But what's more likely to happen is one of the three is going to blink and be the first to adjust price. Then the other two may blink and they'll also adjust. And if they're still all wrong, someone blinks again and again, reducing more and more. And meanwhile the buyers are going "Why have these homes been on the market so long?? I bet there's something WRONG with them!". It's a bad cycle.
So the end result of the groupthink in overpricing might ultimately mean a lot longer time on the market and perhaps even a price LESS than a realistic market value from when they first started.
Here's the bottom line:
Any homeowner can ASK whatever they want for a home, but buyers will only PAY what they feel is fair value.
Understanding the facts of the home prices for SOLD homes coupled with the market conditions will determine the optimal pricing range for a home. You're not going to find that answer on any website, but an experienced listing agent CAN provide you that pricing strategy.
Ready to talk buying or selling a Cincinnati area home? Call Bill of The Liz Spear Team of RE/MAX Elite at 513-520-5305 or email Liz@LizSpear.com.
Serving Cincinnati area home buyers and sellers,
Liz and Bill aka BLiz
Serving Warren County Ohio & Adjacent Areas
The Liz Spear Team of RE/MAX Elite
Elizabeth Spear, ABR, CRS, Ohio License SAL.2002007747
William (Bill) Spear, CRS, Ohio License SAL.2004011109 Kentucky 77938
Ask for us by name if you visit the office!
Two locations: Lebanon & Mason, OH
Bill Direct: 513-520-5305
Liz Direct: 513-265-3004
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