Imagine a homeowner consulting with their agent about the price to place on their home. The agent suggests that the market data indicates that $200,000 to 210,000 would produce a quick sale by pricing it properly. The owner puts a $210,000 price on the home.
The first person who looks at the home offers $205,000. When the seller receives the offer, he comments that he thinks he priced the home too low and counters for full price. The counter-offer is rejected, the home stays on the market and at the end of the first month when based on market conditions the home should be sold, no other offers have been made.
It may be human nature that when an offer is received so quickly, the first thought to come to mind is that it was priced too low. A more appropriate thought might be that it was priced correctly. In some cases, when a home comes on the market, there is increased competition (real or perceived) among the buyers waiting for the “right” home to come on the market. The home can sell for a higher price than if it sits on the market for several months.
There may be stories of sellers who turned down the first offer and ended up receiving a better offer that would net more money. However, real estate professionals generally agree that the first scenario occurs much more frequently.
The wisdom of experience advises owners to find a real estate professional they trust and in whom they have confidence. Allow that professional to become familiar with your home and compare it to similar homes in the market area that have sold recently and ones currently on the market. Determine the demand for homes in the area compared to the inventory. Decide on a price that will allow the home to sell within a relatively short period of time. And lastly, be satisfied if your home sells quickly near the price you put on it, that’s genuine corroboration of the validity of your decision-making.