I’ve heard many real estate agents say over and over again “you can’t price a house too low” or  “If it’s a low price, you’ll get multiple offers and it will rise to where it needs to be.” Aren’t you just lying to yourself and/or adding a little too much puffery in your listing presentation?

I started thinking about this again when I started reading some comments from agents on one of my blogs from a members only site a few weeks ago titled Are You the Blind Agent, Leading the Blind?

Now, I use to subscribe to this thought process for some time. Especially back in 2003, etc. when it was truly a seller’s market around here and the logic really worked. But I challenge agents on whether you really believe in a buyer’s market you can’t price a home too low. You can. There’s no doubt about it. A lot has to do with how well the agent can play the negotiating game, but it is indeed possible to screw this up and get less money for your seller.

I know a house that just closed around here. The appraised price was $30,000 more than the sales price. The buyer’s agent said she would never reveal this to the listing side or the owner may flip. Now, you may say this proves nothing.

What about the fact I’ve seen properties over the past few months get a contract in 2-3 days and other agents were just amazed the listing agent didn’t even go through the weekend or at least the first open house to garner interest and definitely more offers because the houses were truly priced too low. In 3 definite cases I’m thinking of the houses were not sold for over list price by the way so you can’t say it’s because the first offer was so amazing they didn’t want to take a chance and lose it.

I also know of one that just came on the market around here 2 days before Christmas Eve. The agent was blown away she had a showing and an offer in less than 7 hours. She got irritated the agent kept hounding her to mark it in attorney review. The elderly owners were going to sign the contract and stop things, but thank goodness the agent was a good agent. She said it hasn’t even been 24 hours yet. After much discussion, they waited 24 hours and ended up receiving 2 more offers and it went for over asking price by more than $15,000 (that’s all the agent could tell me). Now, what if the agent just stopped after 7 hours and the first offer?

I’m not talking about properties you have priced right. I’m talking about houses where you had that little feeling in your gut it may be too low. But wait, in today’s market, how do you know you’ve done enough research or know your market well enough the house is priced right? Please, don’t tell me you follow the hotsheets so you know. Do you actually take advantage of the Broker Open Houses every week? I’m not asking this question if the house has been languishing on the market without any showings or interest. I’m talking about the house that sold very fast. How do you really, really know in today’s buyer market you weren’t a little low?

Are you really a good listing agent?

Do the right thing:

Make sure your recommendations are in the interest of the home seller

and not your personal bank account.