Chasing Down the Market Scenario
Gary Keller of Keller Williams Realty explains a common occurrence of sellers that are unwilling to price their homes at “fair market value” from the beginning. Often sellers want to start their list price above the suggested “fair market value” because they either just want to “try it” or they want to build in negotiating room. The problem with this approach is that there is a 60 day window of success that allows a home to sell for the most amount of money. If you start too high you end up missing the buyers willing to pay fair market for your home which generally results in a price reduction after the 60 day success window. At this point those buyers have moved on and other buyers see this home as “unwanted” due to the long days on market and the price reductions. This will result in either really low offers or no offers at all. In this case you have to continue to price reduce in order to catch up with the market. This is termed “Chasing the Market Down.” In the end the homes goes “expired” (unsold) or it ends up selling for much less than fair market value and it takes longer to sell.
