The "First Week Flash!"

There is a misconception among many sellers that the smart thing to do when selling a home is to start high on the initial asking price.  "That extra cushion in the asking price will give us some room to negotiate", they rationalize, "And who knows?  Maybe, someone will come along and offer more than market value!"

What most sellers don't realize is that pricing their property too high upfront is the equivalent of shooting themselves in the foot.

When your property first goes on the market, you have a very short window of opportunity... a brief period of time that I've heard some agents refer to as the "first-week flash".  This is the period of time when potential buyers see your new listing and feel a higher-than-normal level of interest in your property.  After all, this listing has only been on the market for 2 days!  Maybe it's a great deal and no one has had the chance to jump on it yet!  This is a powerful exercise in market psychology and something to take note of. Understanding and taking advantage of this phenomenon is the reason many of the houses I list for clients have an offer (at market value) within the first 10 days. 

Still, time and time again I see sellers give into the urge to grab for a little more money, and waste this window of opportunity.  Rather than list at market value, they shoot too high and negate any initial interest they may have garnered from the market.  And several weeks later, after no success... they'll reduce the price.  But by that point their house has been stigmatized by it's own DOM (days on market).  Instead of being excited and curious about the new listing in the area, buyers are now suspicious and critical of the property.  "Why has that house been listed for 125 days?", they'll wonder, "Something must be wrong with it, otherwise someone else would have bought it by now."  That's not to say that a price reduction won't help or that houses can only be sold in the first week, but you'll never recreate that initial flash of interest.

So bottom line... be reasonable in your expectations.  They call it "market value" for a reason... it's the value the market is willing to pay!  If you shoot high, you're only shooting yourself.  But if you price it right on day one, your property will have a big advantage over the competition.