weird and socially unacceptable for buyers to reject an offer at or above the list price for no obvious reason.
In some jurisdictions, it’s legally required to accept an offer at or above the listed price, unless it fails to meet one of the approved reasons (mostly about reliability or timing of financing). I don’t know if any have gone so far as to make it fully fixed-price (must accept the earliest qualified offer at exactly the listed price), but I presume that’ll happen to further reduce immoral dimensions of discrimination.
I think it’s because, on average, they tend to overprice (or underprice less) by accident!
I doubt that. I think some of your reasons are valid (don’t have to work with picky homeowners as long when they’re the homeowner, much easier to coordinate showings and such, etc.). But I think the Freakonomics explanation (they care more about money than time in this case, and they care about money divided by time for their paid work) carries a lot of weight. And I think that the time preference of the owner is likely different. Most homeowners prefer a quick sale, where realtors understand that timing doesn’t matter that much, so are more patient.
I am mainly thinking of hot (rising prices, lots of would-be buyers) residential real estate markets within the USA
In those situations, I think your null hypothesis (it won’t matter much) is pretty close to correct. Assuming the market is deep enough that there are multiple buyers who’d be happy at the top end of a given price range, it doesn’t matter very much where in that range you start. Anchoring matters, but only a little—stronger anchors already exist in the minds of the buyers, in the form of budget analysis and comparable nearby sales.
EDIT: even though I think that asking price (within reasonable bounds) doesn’t have much effect, I _do_ think there are other dimensions of buyer irrationality that a seller should pay attention to. Specifically, cosmetic repairs and staging can have an outsized impact. Spending a tenth of a percent of the selling price to make it trivial for a buyer to picture themselves in a pleasant, worry-free, high-status living arrangement can make much bigger differences than it costs.
In some jurisdictions, it’s legally required to accept an offer at or above the listed price, unless it fails to meet one of the approved reasons (mostly about reliability or timing of financing). I don’t know if any have gone so far as to make it fully fixed-price (must accept the earliest qualified offer at exactly the listed price), but I presume that’ll happen to further reduce immoral dimensions of discrimination.
I doubt that. I think some of your reasons are valid (don’t have to work with picky homeowners as long when they’re the homeowner, much easier to coordinate showings and such, etc.). But I think the Freakonomics explanation (they care more about money than time in this case, and they care about money divided by time for their paid work) carries a lot of weight. And I think that the time preference of the owner is likely different. Most homeowners prefer a quick sale, where realtors understand that timing doesn’t matter that much, so are more patient.
In those situations, I think your null hypothesis (it won’t matter much) is pretty close to correct. Assuming the market is deep enough that there are multiple buyers who’d be happy at the top end of a given price range, it doesn’t matter very much where in that range you start. Anchoring matters, but only a little—stronger anchors already exist in the minds of the buyers, in the form of budget analysis and comparable nearby sales.
EDIT: even though I think that asking price (within reasonable bounds) doesn’t have much effect, I _do_ think there are other dimensions of buyer irrationality that a seller should pay attention to. Specifically, cosmetic repairs and staging can have an outsized impact. Spending a tenth of a percent of the selling price to make it trivial for a buyer to picture themselves in a pleasant, worry-free, high-status living arrangement can make much bigger differences than it costs.
Thanks!!