Some sellers believe it’s smart to price their homes high, but flipping the logic on them could help you see the fallacy of pricing a home for any reason other than what a qualified buyer in the current market will buy, based on current market comparable homes.
Buyers want to negotiate: Some sellers believe buyers will automatically offer less than asking price. In reality, they offer what they think the home is worth, what they believe the seller will accept, and what their lender will agree to lend on the home.
For sellers to win, buyers must lose: If the seller assumes the buyer is a “greater fool,” who’s going to be accompanied by a foolish real estate professional, and a foolish lender, then their high-priced home might sell. But isn’t it far more likely that the buyer is well informed and will choose wisely.
Sellers are entitled to make a profit: Home prices historically beat inflation by one or two points annually, but sellers must keep their homes updated and well-maintained for them to hold value. Home flippers must make significant improvements to make it worth more to a buyer that what it sold for two years ago.
The home is also a bank: Sellers may dream of selling their homes to pay off debts, buy a more expensive home, retire, pay for collage, etc. Buyers don’t mind giving sellers a profit, but if the market conditions don’t support the seller’s expectations, they’ll move on to other homes.