Sell cheap, buy cheaper
I had an interesting conversation today with a very nice couple whose home I'll be listing in the next day or two. They were concerned about how to price their house considering the buyers market we currently are finding in the Charleston South Carolina real estate market. Their primary concern was whether they should pad their listing price a little to account for the fact that buyers today generally won't make full price offers.
In this particular case, I would have gone along and added a few thousand dollars because their home is special but I reminded them that just recently, a very comparable house down the street sold and that set the current price for their neighborhood. We also talked about how people search the Internet for homes and how they should want to be at the top of the bottom range and not at the bottom of the top range. It's all about buyer psychology, if someone is looking from 25 to 50 and it doesn't matter whether it is 125, 225, 325 or whatever, they will likely buy at the top of their range in the high 40's rather than lower part of their range in the high 20's.
We talked a little about where they were going to move to and how they have been searching for homes and here is where it got interesting. They are searching only up to the top of their range and not adding a few thousand dollars to their search criteria. They forgot that if the buyer for their house wouldn't pay their asking price, they would be able to do the same by negotiating an offer for less than full price when they made an offer.
Since they will be relocating out of town, I asked if they found an agent in their destination city and since they hadn't, I told them I would be happy to get in touch with several really good agents so that they would be well represented during their relocation.
The moral of the story. During the sellers market, homes sold for top dollar but when you went to buy, you would also pay top dollar. During today's buyers market, even if you sell for a little less, you will also be able to buy for a little less. In other words, sell cheap, buy cheaper.