Pricing your home right is all about attracting the right buyers to your home. That is the purpose of the list price. Attracting the right pool of buyers most likely to view your home as a value. When priced too high, buyers will be comparing your home to better options. Consequently they will have a negative view of your home. This is true for all price points and all homes. There are always nicer options and when priced too closely you’re simply driving them away from your home to other homes you shouldn’t even be competing with.
I had a listing and we were priced too high for what we had to offer, mostly due to the apartment complex behind the home. Virtually all the feedback from buyers was negative. They were complaining about finishes and the location. The problem was we were fishing in the wrong pool of buyers. The buyers viewing our home could afford more and would spend a little more to get something better plus they wouldn’t compromise on the apartments.
Once we lowered the price it was surprising how positive all the comments were. We lowered it from $217,000 to $209,000, which on the surface isn’t a giant switch but it was enough. Now no one was complaining about the apartments at all or the finishes. At our new price we were fishing in an entirely different pool of buyers. The first pool of buyers were looking from $215,000 to $235,000+. After the price change we were attracting buyers looking up to $210,000 max. This new group of buyers were comparing our home to their options under $210,000, which weren’t good. Now we were able to effectively compete. Not surprisingly we now received multiple offers and even sold it for higher then list price. Keep in mind the result. We got a higher price when we listed it at $209,000 versus keeping it listed at $217,000. Lowering the list price obtained a higher sales price!
A competent listing agent will be able to educate you about the market and which homes you can compete with and which ones you should be avoiding. Which pool of buyers to aim for and which pool to best avoid. When a home is priced right you will be focused on the right group of buyers and will increase your chances for success.