The Third-Broker Theory: Why Overpricing Your Plateau Home Can Cost You Big

Have you ever heard of the “third-broker theory” in real estate? It’s a cautionary tale that illustrates the costly consequences of overpricing a home. Here's how it goes:

The first broker, eager to secure the listing, agrees to an inflated price without fully explaining the risks. The second broker enters the picture, critiquing the initial effort and perhaps enhancing the marketing and photos—but still avoids addressing the elephant in the room: the price. Finally, the third broker steps in, convinces the seller to make a meaningful price reduction, and successfully closes the deal.

This sequence highlights an undeniable truth: pricing your home correctly from the outset is essential to achieving a successful sale.

On the Highlands-Cashiers Plateau, getting the price right is even more critical. Our market is often driven by second-home buyers—discerning individuals who are under no pressure to make quick decisions. They can take their time to evaluate options and will quickly move on from an overpriced property. Conversely, a well-priced home immediately grabs the attention of serious buyers, generating interest and even sparking competitive offers.

Overpricing doesn’t just delay the sale; it can harm your market position. A property lingering on the market for too long raises red flags for potential buyers. On the Plateau, where home values are higher, and the average time on market is around 120 days, anything beyond this benchmark can stigmatize the property. Instead of asking, “What should we offer?” buyers may wonder, “What’s wrong with it?”

The consequences of overpricing don’t end there. When a home finally goes under contract after months on the market, the seller’s negotiating power is often diminished. Inspections might uncover issues, and buyers may feel emboldened to demand steep concessions or walk away altogether, knowing the property has struggled to sell. Relisting at a lower price can exacerbate the problem, leaving sellers to answer difficult questions about why the initial deal fell through.

Consider these statistics from reports by Zillow and the National Association of REALTORS?:

• Overpriced homes often take 30-50% longer to sell, leaving owners to bear the financial burden of carrying costs like mortgages, taxes, insurance, and maintenance.
• Nearly 46% of homes require at least one price reduction before selling.
• Overpriced homes see 50% less interest from buyers during the critical first two weeks of listing.
• Ultimately, overpriced homes often sell for up to 15% less than their original asking price—and even 10% less than their final reduced listing price.

So, how can you, as a Plateau homeowner, avoid this costly path? Start by partnering with an experienced and honest real estate broker. A skilled broker will conduct a thorough market analysis, provide realistic pricing guidance, and set expectations from day one. They’ll also be willing to consult with other professionals if needed to ensure your pricing strategy is rock solid.

Pricing your home correctly from the start is one of the most important steps to ensure a successful sale. With the guidance—and trust—of a knowledgeable Plateau broker, you can position your property to attract serious buyers, avoid the pitfalls of overpricing, and achieve the best possible outcome.

Originally published in Highlands Newspaper on January 16, 2025.