Sometimes it's difficult as a seller to find out that your home is worth less than you thought. I always encourage my clients to price right initially so they can sell quickly and at top dollar. For example, a house should be listed at $549,000 but a seller insists on listing at $599,000. Because it's priced too high and a buyer is not willing to purchase a property for more than it's worth, it sits on the market. Often times, it can take more than one price reduction to ultimately sell the house. On average in Oakland for 2010, a seller had to reduce by 14% to sell.
Let's do the math.
Agent suggested listing price: $549,000
Seller insisted listing price: $599,000
Ultimate selling price: $515,140
In this scenario, the seller actually lost $33,860 compared to if they had priced it right at $549,000. This doesn't take into account the mortgage, the property tax, etc. the seller had to pay while maintaining the listing.
A recent client of mine went with my suggested listing price of $329,000, and we just closed at $347,000. My seller obtained 3 offers in 6 days, and the market took the price where it needed to be - $18,000 more!
I really try to be honest with my sellers about property values. As you can see below in the chart, Red Oak Realty sells more of their listed properties than our competitors.