When pricing your home to sell, it's important to remember that buyers behave very differently depending on how they feel about a list price.

When a buyer walks into a home -- or even just sees it online -- one of the first things they're doing is thinking about the list price. Is it fairly priced?  Is it under priced?  Is it priced way too high?

If a buyer thinks a list price is at or just slightly under market value, they will be motivated to act and likely to act quickly and decisively.  They feel like there's something worth going pursing and they'll quickly be deciding what they can offer, how quickly they need to make an offer, and whether this is the one they have been waiting for.

But if they think the price is above market value? This typically causes buyers to slow down. They hesitate... or might even just move on and consider other houses. Even buyers who love the home will sometimes talk themselves out of making an offer on a home they think is overpriced -- because they don't want to overpay, and they don't think the seller is being realistic.

So what does this mean for sellers?

A well-priced home tells buyers that you know what you are doing, and it is worth the buyer's time to pursue the home.  An overpriced home sends the opposite message.

I've seen sellers in Harrisonburg price their home $20K or $30K above what the comps support... and then it often sits on the market for months without many showings.  Meanwhile, a neighbor priced theirs right, had multiple buyers competing, and had a strong contract in hand within the first week.

The irony is that trying to leave room to negotiate by pricing high often backfires. You won't have the opportunity to negotiate because you won't have an offer (or offers) to consider.

Pricing at or near market value draws buyers in, can create competition, and often results in a better outcome than reaching for a number the market won't support.