A knowledgeable buyer will structure their price and offer predicated upon market data, not what a seller asks.
Some (many) sellers price high, in the hopes to leave some wiggle room for negotiations. Other sellers utilize â€œunderpricing as a market strategy.â€ I strongly support the latter, so long as there are active buyers in the market to compete and it is a conforming property. I do not recommend underpricing as a strategy for highly unique properties.
When there enough active buyers in a markeplace, underpricing will facilitate mulitple offers and allow the forces of supply and demand to achieve the highest and best price for the seller. While this marketing method can be highly effective, most sellers are reluctant to engage it. Most sellers fear they have left money on the table, and prefer to â€œtry itâ€ at a higher price, and adjust if necessary. Some sellers are still adjusting 300 days later.
There is nothing wrong with paying over list price. There is also nothing wrong with making an offer substantially lower than list, if the market and situation support the low offer. Base offers on market forces, not ask price.
All the best,
Deborah Madey - Broker
Peninsula Realty Group - New Jersey