The “Buyer’s Market” Pricing Conundrum

Pricing is a vexing issue for both sellers and potential buyers in this so called buyer’s market. One reason say “so called” is that there are many homes artificially inflating the number of homes on the market. They are not priced realistically and simply will not sell, at least not any time soon. The sellers are either unable or unwilling to grasp the reality of the current market or think it magically doesn’t apply to them. Their homes may as well not even be on the market because, in essence, they aren’t. They are wasting their own and other people’s time. Similarly, buyers who are trying to “steal” well priced homes by making insulting offers also are not actual buyers. They are time (as well as gas) wasters.

There is a distressed market segment of foreclosures and short sales, but that needs realistic pricing to function as well. Overpriced listings don’t attract offers and unrealistically low offers don’t result in accepted sales contracts.
The question for the seller is; “Do I price my home higher than is realistic, acknowledging I’m going to get beat up when the offers come?”
The buyer’s question is; “I’ve found the home I really like and it seems priced well, should I make a low ball offer?”
For the seller, if you’ve priced your home well, you needn’t accept bad offers. Leaving a little negotiating room has always been wise but pricing too high by building in too large a buffer will preclude offers coming in the first place. You’ll end up lowering your price, possibly several times and settling for a sale at a lower price than if you had priced the home correctly in the first place. By pricing competitively when your home is fresh on the market, you maximize your advantage versus stale and/or overpriced listings. Testing this market by pricing high and thinking, “we can always come down”, is a disastrous strategy. It will cost you thousands after you’ve missed the real buyers for your home and the vultures start circling.
For buyer’s, unless you’re one of the aforementioned vultures who enjoys shopping the picked over remains of the market, new fresh listings are still the best opportunity to find a good home at a good price. If it’s priced well and offers the amenities you want, don’t treat the seller as if they have a stale overpriced listing. I’ve seen buyers, even in this market, lament “the one that got away” because they procrastinated or tendered a low offer and waited for the sellers to come down significantly, only to have someone else buy the home they really wanted. This is still a good market for good homes that are priced right.
If you enjoy playing the market, either as an unrealistic seller or as a low ball buyer, you’ll probably end up playing with each other. As a seller, you’ll end up in the picked over pile of stale listings in a declining market. As a buyer, you’ll be picking over those listings. So, you need to ask yourself, “Which market am I in?”