The psychology of a listing price

Chalk this one up in the "sad but true" category. Not all listing prices are created equal, even if the numbers are the same. There are many examples of sellers who list their home for X and don't sell. They then lower the price to Y (or even to Z), and the house sits on the market at that price, seemingly forever. Had they priced it at Y or Z in the first place, the house would have sold.

How can that be you ask? Simple psychology -- potential buyers assume either that something is wrong with the house (why else would it have been on the market for so long?) and/or they smell weakness and assume that the seller will lower the price yet again.

My advice to buyers:

1. Try not to let "days on market" bias you against a listing.

2. Don't be afraid to make an offer, even if it's a lot lower than the asking price!

 

Topics: house prices , home values , buyer tips