Setting the Asking Price when Selling
Many people think that there is a correlation between putting a high initial asking price on an advertised property and achieving a high final selling price. There’s certainly a link, but it doesn’t work the way many people think.
In fact, the opposite is often the case. If a property is really overpriced, purchasers just sit back and wait to see what happens. If they’ve been looking around long enough to be ready to commit themselves, they’ve also made themselves very familiar with what they can get for their money.
It is common for inexperienced vendors to overprice their properties in the belief that the "right" buyer will eventually come along – someone who will fall in love with their property and pay the earth for it. But people buy with their pockets as well as their hearts. No one goes into a real estate purchase without making comparisons and weighing up all the factors.
Many inexperienced vendors make the mistake of thinking that no matter what price a property is advertised at, purchasers will always make offers.
Put yourself in the purchaser’s shoes. Buying a house is really stressful. Most people won’t let themselves get emotionally committed to something they feel is never going to come down to a realistic level. It’s easier psychologically to move on and make an offer on something that is more realistically priced.
It is wise to leave a negotiating factor when setting your asking price. But price your property to create a sense of competition so that purchasers will want to snap it up before someone else does. The best price is nearly always achieved in the early stages of marketing. Hence the first offer is usually the best offer.