There is a condition in the real estate industry in Nashville and elsewhere that most agents dread. It’s called “Stale Listing Syndrome”. A house that stays on the market a very long time. The buyer's agents in the area know from showing it that it’s overpriced. When it first came on the market, there was nothing wrong with the property except for the unreasonable price tag.
Originally, the owner was not persuaded to understand the reason for the listing price suggested by the agent during the listing presentation. He wanted to “see what happens if we list it for $50,000 more”. Six months later, after Buyers and their agents have provided feedback that contends the house is unrealistically priced, the Seller, still not convinced, fires the first agent and hires another.
Three months later, still on the market, he’s finally ready to accept the truth about the value of his house. He hires yet a 3rd agent. She recommends drastically lowering the price. It gets shown a lot, but Buyers and their Agents have not forgotten how long it’s been on the market and by now are worried that there is something really wrong with the house. After all, it’s been listed for 6 months, involving 2 Realtors and has gone on the market a third time with a third Realtor.
At that point, it’s nearly impossible to get rid of the bad reputation the home has received. It’s become a “Stale Listing” and that’s not good. It also reveals a more subtle message to the public and to Buyers Agents; that the Seller may be someone who’s hard to deal with.
Every area of the country has its own threshold for how much a property is considered “overpriced”. In Nashville, it doesn’t take very much to “overprice” a listing. As little as 10-15% over what the market will bear can sometimes be enough to keep Buyers from even looking at certain properties. In our very slow market in the last few years, the only way to sell a property was to “under-price” it. Of course, what the Seller and his Agent were calling “under-priced” turned out to be “fair market value” – what a Buyer was willing to pay for it.
A stale listing usually always sells for less than what the projected “right price” was in the beginning. Both time and money are lost with stale listings. The only one who “wins” in the Stale Listing Syndrome is the third listing agent who ends up being in the right place at the right time. When a stale listing finally sells.
Read more about "How to Price Your Home" from the Realtor.com website.