I know a very nice young couple who are thinking of listing their house in another town and have received conflicting advice. Their agent wants them to shave 10% off what they paid for it four years ago, while others tell them to list it at at least what they paid for it. I’m with their agent on this and in fact I’d recommend taking another 5% off from that. Here’s a sad tale showing why:
52 Fairfield Road, a good house on a somewhat tricky curve, sold for $2.4 million in March 2006. In March, 2007, the buyers tried reselling it for $2.9 and, having lost momentum with that kind of overpricing, rode it down through a couple of price drops until it expired, unsold. It’s back on today, this time at $2.150 million. That’s a good price and I hope they get it, but I suspect they’d have sold their house for more and moved on sooner had they priced it more realistically to begin with.
In this market, the only buyers are bargain hunters. Pricing your house for what you paid for it says, in effect, that you are determined not to take a hit , and that scares bargain hunters off – they wantyou to take a hit - that’s how they know they’re getting a bargain. Harsh, but don’t forget, you’ll be doing exactly the same thing to whoever is selling the next house you want.