Price right during the 'sweet spot' period
The 'sweet spot' of a home sale cycle runs from week two to week eight. It is a critical period in which the inflow of enquiries is strongest - and when right pricing is the path to a successful sell/buy outcome. If the home is not priced right during that time frame, a negative perception on the value proposition will take hold. And that negative sentiment is sticky and prevails - irrespective of whether or not the seller has subsequently seen the light and dropped the price. (see Ted Talk below)
Disillusioned prospective buyers generally don't come back, even if the price is adjusted later.
The 2008 financial crisis proved that point. When it happened, world markets crashed - and sentiment followed precisely the same curve. By 2010, financial markets had more or less rebounded to where they were before the crash, but sentiment had only crept up slightly.
A negative mindset is a sticky mindset
If a prospective buyer's first impression of a home for sale is negative (due to an inflated price) the perception will take hold - and the buyer will be unlikely to return when the price subsequently drops. In a TED TALK presentation (essential watching) on how people think, social psychologist Alison Ledgerwood says "...our view of the world has a fundamental tendency to tilt towards the negative. It's pretty easy to go from good to bad, but far harder to shift from bad to good. We literally have to work harder to see the upside of things."
Home sellers who do not price right from the outset take the risk of missing the sweetspot as responses to advertising dwindle after about eight weeks.
A glass half full
Sellers need to have would-be buyers walk into their property and at least see the glass half full. Buyers who find that the home is overpriced will perceive the glass to be half empty. The problem with half empty is that the buyers tend not to come back. The fact remains that most home sellers still insist on being 10% to 20% overpriced from the outset. That is why so many of them miss the "sweet spot".
Author: Ronald Ennik