Realtor Magazine ran an article about what David Knox, a real estate trainer in Minneapolis, called "Price Denial Syndrome". It is what many sellers (but not ALL) are cursed with in today's market.
Sellers afflicted with this condition tend to resist the reality that they must lower the listing price of their home, unwilling to accept that the days of the boom market are gone, said Knox, who spoke at the REALTORS® Conference & Expo in Orlando last week.
Common symptoms of Price Denial Syndome include blaming their Realtor for suggesting a price reduction and trying to justify why buyers would pay the higher price.
But here's the truth: Homes are simply not going to sell if they are overpriced in the current market. In a hot market where demand outstrips supply, overpriced homes might sell, but “in a falling market, overpriced homes sit unsold,” Knox said.
Here are some commonly hear price reduction objections from sellers: (excerpted in whole & in part from Realtor Magzine)
- “We really need the money.” I am completely sympathetic to this situation. And don't take this the wrong way, but it isn't the buyer's problem. A buyer will not overpay because you need the money. That may put them in the same boat 6 months down the road. Unfortunately, if you need to sell, it may have some financial repercussions for you.
- “We can always reduce the price later.” A property that lingers on the market too long is often plagued by constant price reductions to generate buyer interest. The more price drops, the more buyers keep waiting for more. The home will likely sell for lower than what it should and take much longer to sell too.
- “Could we just try it at this price for two weeks?” Buyer activity is highest when it’s just listed so don’t turn off the serious buyers at the beginning.
- “They can always make an offer.” Some buyers won’t even look at a certain price point so you’ll likely be excluding buyers who would be more serious about purchasing it if you don’t price it appropriately, Knox said.
Buyers are also afflicted with Price Denial Syndrome in that they absolutely refuse to believe ANY house is priced at or below market value. Some buyers are waiting for the market to bottom out before they act: “We want to buy at the bottom of the market.” “But you can’t buy what it was – only what it is,” Knox said. By the time the market starts to turn around, they’ll be buying on the way up and likely miss out on lower interest rates and face multiple offers with sellers less apt to negotiate.
This is true of buyers waiting until spring. What is the quote about Spring bringing hope? Well, that is where sellers are in the spring. There are so many more buyers out in the market that sellers get hopeful that another offer is just around the corner. If the house is a gem, you are also more likely to be competing against multiple buyers.
