It's easy to notice, hard to see
Lance, who is now a regular here, wants to know if you are seeing sharp declines in asking prices.
Put aside for a moment the issue of whether or not this particular seller's agent misbehaved... Am I the only one here who is not surprised to see the asking price for a property cut by 15-30% since last year? I can provide many similar examples if people don't think price reductions of this magnitude are really happening. The credit bubble popped last summer and real estate prices are tanking. Is nobody else seeing this?
I have been consistently saying that asking prices are not real. Some are too high, some are intentionally too low, and some are pretty close to what the property should sell for. One of my tasks as a buyer’s agent is to help the buyer know the difference and to negotiate accordingly.
So, for the record: Rona sees that many asking prices come down dramatically from the original asking price before they sell.
However, sharp declines in original asking prices are not necessarily an indicator of a declining market. Suppose a listing is 10 percent overpriced, and comes down 5 percent for a sale; it is still selling at 5 percent over the present market price. Inflated prices are an indicator of continued denial of the changes by sellers and their agents. Sale prices are the only price measure that matters. Period.
When the market was rising, asking prices went up like a rocket. The prices come down in a more inconsistent manner. This is true of all sales. Think about how the gas prices go up all together, but come down inconsistently.
Overpricing a property, IMHO, is a disservice to the marketing. In my experience, those are the homes that frequently sell for less than they could have gotten if they had been priced competitively from the start. As a buyer’s agent, I look for such properties, because I have a better chance of getting a good price for my clients.
Sellers, if you realize that you overpriced, do you regret it? Did it hurt your bottom line in the end?
Buyers, did you get a good deal on an overpriced listing?
Please, please..let's talk about the business of this, and not the personalities!
