Stop Helping The Competition Sell Their Homes
I witnessed another perfect example this morning of how a drastically overpriced home helped sell a neighbouring property.
My father-in-law and I were discussing these two properties a couple of weekends ago while the were both listed for sale. He couldn't believe that there was a $100,000 difference in price in two homes on the same street. It should mention here that $100,000 difference represents a 40% premium on the more expensive home. (These aren't million dollar homes.) The homes are similar in style and interior finish, and while the more expensive home has an extra garage bay and slightly larger rooms, it has an undesirable corner lot. Both have identical number of bedrooms and bathrooms. In my opinion the more expensive home should only be $25,000 more, not $100,000.
We I loaded up the Hot Sheet today (our daily list of market activity) and the better priced home has sold just under list price in just over one week, while the over priced home has been sitting for over a month and will continue to sit and help sell other homes, until the seller has a reality check.
People are great comparison shoppers, our brains do it automatically without much conscious thought at all. We walk through stores and browse online for hundreds of different types of products all available in different configurations and price points, and somehow we can just tell when something is a good deal or when it is over priced. Our brains calculate "value" automatically. It the same with real estate buyers. The only thing you do when you overprice your home this drastically is make every other home in your neighbourhood look like a great deal. Watch other homes continue to sell for market value while the overpriced one collects dust.
There is no way to tell who is at fault, did the seller get bad advice from their Realtor? Or did the Realtor just price the home how the seller wanted? Either way neither of them will see any money from this property in the near future.