To make myself a better Realtor I have taken up the habit of doing more reading, I'm now reading through the Book Shift. Its all about how a Realtor should take action during a downward shift in the housing market. Something that I have always known from the very start of my Real Estate career is that over priced homes are extremely difficult to sale this fact is reiterated throughout an entire chapter of the book. One point that it brings up is the price reduction effect which is basically were sellers want to start off high with their price and if they have to slowly drop their prices over time. The problem with that is while the sellers are "testing the market" they are missing out on valuable buyers and waisting time on the market.
I often work with buyers and as we are shopping and looking at homes one thing that is always considered when viewing a home is how much time it has been on the market. Anytime I tell them that a home has been on the market say 100 days or more one of the two following questions is asked almost every time. 1.) Whats wrong with it? 2.) So that means they must be desperate for an offer? In the contrary if I tell a buyer that a home has been on the market for a very short amount of time they usually ask or I tell them that it may be kind of hard for us to get them off their price. The graph below is an example of how overpricing your home can cost you major dollars over the long run.
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