Underpricing rarely a fruitful strategy, even in hot markets: study

The premier event for luxury agents and brokers
Luxury Connect | Oct. 16-18 | Beverly Hills

Overpricing a listing is generally the best way for sellers to fetch the highest sales price for a home, even in hot markets, according to a recent study from The Wharton School at the University of Pennsylvania.

“Our findings based on market data … should give serious pause to any seller who is tempted to underprice a property in the hopes of generating a ‘bidding war’ per the advice of their Realtor,” researchers wrote in a report on the study.

A home that’s listed 10 to 20 percent higher than other homes in its neighborhood commands an additional increase of 0.05 to 0.07 percent in the sales price for each 10 percent increase in the expected price, according to the study’s results.

Source:  The Wall Street Journal and Journalist’s Resource