In real estate, four pricing strategies by home sellers and their Realtor have been in place since Adam & Eve had to go out and look for a place of their own!
Every seller wants to maximize the amount they receive. They may have an inflated value of what their home is worth because of: getting opinions from un-informed advisors and friends, having an over-financed house, or they have renovated their home to a standard not consistent with their neighbours.
About 35% of the homes on the market are overpriced. These homes sit on the market longer than they should as well. There are two main reasons these homes are overpriced. The seller believes that the house is worth more than the market has indicated, OR, the seller has left room for negotiating.
Priced Correctly at Market Value:
Some sellers understand that real estate is part of the capitalistic system of supply and demand. They have realistically priced their homes based on a thorough analysis of other homes on the market prepared by a competent and knowledgeable Realtor. These competitively priced homes usually sell in a reasonable time and very close to asking price.
Priced Below the Fair Market Value:
A quick sale motivates some sellers. These homes could attract multiple offers and sell fast, and, at or above, the asking price!