Setting a realistic list price makes life easier for everyone involved in home selling. If an unskilled or overzealous seller estimates a home’s value too high, the house might not be sold for an extended period. Houses that have been for sale for more than 30 days often go unsold for much longer because buyers’ agents and buyers think something must be wrong with the house. In a case like this, a seller will need to drop the list price, sometimes below the market value, to sell the house.
On the other end of the pricing spectrum, some sellers want the list price to be below the market value to generate interest from buyers. The sellers hope to start a bidding war to try and get more than market value in the end. This strategy sometimes works, if there is a seller’s market. Other times, it backfires: The low price leads buyers to think the house is only worth the list price.
When you ask your real estate agent, “What is my home worth?” you will get an honest answer about the market value of your home. Your agent will advise you to set the list price at approximately the market value to expedite the sale and get the proceeds you want from the sale.