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Health & Fitness

Testing, Testing: A Cautionary Tale of Home Pricing

Have you ever seen a Mercer Island house that's overpriced and wondered, "What are they thinking?!"

Sometimes, sellers do what's called "testing the market." Pricing a house higher than what market data for Mercer Island homes suggests, hoping they will get lucky and find just the right buyer who is willing to pay their price despite what is happening in the market. It may seem like a good idea, especially for those who aren't in a big hurry to sell.

Why not, right? You're in no hurry, and maybe you'll get that higher price that you want (or need). Sometimes it actually does happen. A seller gets a few thousand dollars–or more–than what comparable properties are selling for on Mercer Island. But is it really worth the time, effort, and risk?

Think of the time and effort (and money!) that goes into getting a house ready to sell. Cleaning, packing, storing, getting the yard spiffed up, painting, etc. It's a lot of work! Then think of what happens when the home hits the market. As a seller, you have to deal with accomodating showings (often with little notice or at inconvenient times), open houses, and people driving by, appraising your home from the street.

Not to mention the marketing that the real estate agent is doing (and spending money on), like bringing in a professional photographer, creating flyers and other print materials, and managing the listing online on multiple websites, among other things.

Finally, there's the risk. What risk? Think of it this way: The most buyers will be looking at a listing during the first two weeks–if not first few days–on the market. Even buyers who haven't been studying the market closely can spot a good value or an overpriced home pretty quickly. And once they've passed on YOUR home, they almost never come back to it. Even after a price drop.

Why? Perception. Whether or not it's true, an overpriced listing will lose buyers' consideration because they don't see the value. Then after it sits for a while (weeks, or months depending on market conditions), buyers are likely to think there is something "wrong" with it, or that the seller is unreasonable.

After all, if this Mercer Island home is so great, why is it still on the market? (Think of how many times you've thought this about a house.)

I truly believe that when you're thinking of selling, the best approach is to study the Mercer Island market with your Realtor and base the price on good, realistic comparable properties that are actually selling. If the market indicates that the desired price is too high, it may just not be the right time to sell and/or it may be a good time to really examine your motivation for selling.

How do you feel about testing the market when it comes to selling a home? Tell me!

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