there are some agents that will take a listing that's overpriced and hope to wrestle price reductions from the sellers...some of those sellers won't accept the reality that they have an overpriced dog and the agent is stuck with the thing until it expires
Either way you look at it, the problem is the price. So why are the prices on some of those properties so high? Could be lots of reasons:
**The seller has a large mortgage and feels he/she has to price the house that high in order to sell conventionally. Example: The house is worth $250,000. The seller owes $245,000. After you factor in real estate commissions, negotiating the price with the buyers, negotiating the price again after the home inspection, the seller calculates that he has to sell the house for $265,000. Unfortunately, he's overpriced the house and so won't get any offers on it.
**The seller remembers what his neighbor got when he sold the identical model 2, 3, or 4 years ago. The neighbor sold for $300,000. The seller thinks he's being flexible by only listing it for $265,000.
**The seller has sunk a lot of additional money into the house--much of which won't yield any return when he sells. Or it's a low payback. Let's say he's put $15,000 into new appliances, new bathrooms, new carpeting, etc. His agent tells him that other houses in the neighborhood sold for $250,000. But the seller figures that since he's spent $15,000 on improvements, that his house is worth $15,000 more. (It isn't.)
**The seller figures that with the right marketing, someone will be willing to pay $265,000 for his house. Maybe open houses every weekend. Maybe constant ads on Craigslist. He knows that $265,000 is on the high side, but figures that there isn't one precise "right" price. C'mon, it's a range. So sooner or later, he figures, someone will come along, fall in love with the house, and pay a bit more than the market says it's worth.
**The seller figures anyone making an offer is going to offer less. So, rather than pricing at or close to $250,000, he'll just price it higher and then negotiate with someone who makes an offer.
There are other reasons, too, but those are some of the main ones.
Tip: You've listed yourself as a "Home Buyer." I'm guessing you'd consider making some offers if the prices weren't "artifically inflated." So: Make offers. Consult with your Realtor. Get CMAs on properties you're interested in. Then resolve to pay no more than the CMA. Probably offer less. Using the example above, you'd probably offer somewhere between $235,000 and $250,000. ($235,000 so that if the seller was willing to "split the difference," you'd come out somewhere close to $250,000. Offer $250,000 as a "take it or leave it price.) Again, your Realtor can suggest the right strategy.
But what do you have to lose? If you don't make an offer, you know you won't get the house. If you make the offer and it's rejected, you're no worse off than you are now. If you make the offer and it's countered, you may be able to get the house at a reasonable price. And if you make the offer and it's accepted, you've bought the house at a fair price.
Hope that helps.
If you would like to discuss your specific situation, please don't hesitate to call.
Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called â€œchasing the curveâ€) and Buyers will be asking the question; â€œWhatâ€™s wrong with that house?â€ and â€œWhy has it been on the Market so long?â€
Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; â€œArenâ€™t you obligated to sell at this price if someone offers it?â€ The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)
Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.
Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.