ELI5: What Causes Real Estate to Consistently Sell Above the Listed Price for So Long?

Real Estate Transactions
1

I’m curious about a pricing anomaly in the property market.

Properties sometimes sell for more than the listed price over an extended period. This makes me wonder why new sellers don’t simply adjust their asking price upwards to reflect the strong market conditions. Instead, sellers seem to hold back on increasing the price despite rising market offers. Could it be due to strategic negotiation, psychological pricing tactics, or other market dynamics? I would appreciate insights into why sellers might choose to keep their initial price lower, encouraging competitive bidding and ultimately resulting in higher final sale prices.

2

The phenomenon likely stems from sellers’ strategies that are designed to stimulate competitive bidding. In my experience, many sellers deliberately set lower asking prices to attract a wider pool of potential buyers. This approach often leads to a competitive environment where buyers bid against each other, ultimately raising the final sale price. Although it might seem counterintuitive, this method can result in a higher closing price, especially in a market where demand is robust and buyers are eager to secure a property without the uncertainty of overpaying initially.