Sometimes a seller asks to price a house on the high end of the market. (Don't confuse this with the decision to list a property far above the comparable sales. The sellers of these homes are unrealistic, and set a price in the stratosphere. We describe agents who list these homes as "buying the listing," and the houses seldom sell.) The problem with listing on the high end in a declining market is that the price never quite catches up.
I remember taking such a listing in my early years in the business. The house was in San Jose, and the sellers were transferring to the Boston area. The sellers insisted on a listing price that mirrored the highest comparable sales, but their house backed on a busy street, and it turned out that we were on the cusp of a declining market. On top of this, the wife went on ahead to Massachusetts to start her job there, and the husband was not the world's best housekeeper. The price was lowered over and over as we followed the market down. Finally, many months later, we sold the house...fortunately, they were pleased with my service, and didn't blame me for the slow market.
A new study just published by the Otteau Valuation Group shows that homes listed at a realistic price sold at listed price or above in a short time, and those priced higher took longer to sell, and ended up selling for less than the first group.
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