Listing Stragergies
There are a few different strategies when listing a property for sale. Pricing right, Pricing High or Pricing Low.
The most common strategy is to list the property high, in hopes that if a buyer makes a low offer, then the price can be negotiated up. This is the most common pricing strategy that I see sellers wanting to do. It can work very well in a market that is heading upward.
However, a few sellers will do the opposite and price a property low in hopes of a bidding war.
The first strategy of listing a home high used to work well when our market was going upward. Now that the market seems to be moving downward, many sellers are being victims of “chasing the market downwards.”
Sellers are pricing their homes high, anticipating a buyer to negotiate. However, what I am seeing now is that there are many sellers chasing the market down.
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For example:
A seller does not price their property aggressively and therefore after a month, lowers the price. Then another month passes and the price gets lowered again. Still there are no offers because the seller is just a tad bit too high in price. They are behind the market not in front of it.
Meanwhile, the market continues to move slowly downward. This is called chasing the market down. It’s not a fun position to be in.
It Happens in Our Market
Recently, I had a buyer purchase a home in Lihue for $1,300,000. Their original offer for this home was slightly less than $1.3M and was rejected. At that time the home was priced at $1.4M. The listing agent explained that the seller is firm on her price because a year ago she got offered $1,600,000 for the home and denied that offer, since at that time it was priced at $1,800,000.
The seller was eventually motivated enough to sell at $1.3M. This was a major loss for the seller, but a win for me and my buyer!
