It is common for sellers who love their property to feel that it should sell for a better than market price! That tendency is exacerbated in a strong market. Experience shows that overpricing in a strong market can really hurt the ultimate sales price as people brand the property early on as “pricey” and the seller to be “unrealistic”. First impressions do matter. It is easy for me to say “be careful not to overprice”, but when the media has hyped the strength of the market, it is often hard for sellers to heed brokers’ cautionary advice on pricing.
The common wisdom and my own experience has shown that proper pricing is crucial no matter the strength or weakness of the market. It is particularly important to “get the pricing right” when the property is first listed because that is when there is the highest level of activity and excitement. In an active market, a well-priced apartment can often generate a bidding war that results is an above-market value – sometimes significantly so! Whereas an overpriced property will sit and become stale quickly – especially if other properties are actively selling.
A common misconception among sellers is that the initial flurry of activity and early offers on their apartment especially occurring in the first week or two of listing means: 1) that the property was underpriced. Indeed the opposite is true: the property was properly priced if such a scenario occurs, and/or 2) that the initial excitement will remain consistent and that there will be higher offers. Well, that may or may not happen but historically, the old adage, “first offers are the best offers” most often is true!