When pricing your home, you must consider not only how much you want to net, but also, it must be reasonable with similar properties in the area or you may end up falling out of Escrow. Should your buyer need to finance the home (and most do), the bank will order an appraisal to be done justifying the price of the house. If it is above market value, the loan will only be approved up to the market price. If the buyer really wants the home, they can come up with the difference in cash (and some do just that). Realizing they are paying too much, many will back out of the purchase.
Pricing a home must take into account not only the current home inventory; it must also take into account what has sold in the last three months AND take an educated guess into the next 90+ days.
To Low? A home priced too low, will usually receive multiple offers, which drive the price up in a bidding war (remember just a few years back?) As long as the seller doesn’t accept the very first offer and gives it time to build, the price should drive up the price to near market value.
Being priced too high is the real danger. If too high, the property will be "off the radar"; a search for a home in the 400k to 500k range will never "see" a home at 501k. Even if the seller offers multiple incentives (closing costs, etc.), it will not show up in an agents search to even show the property.
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