We write this while simultaneously cringing *drumroll*: price your property with a healthy cushion that allows for decent negotiation. Why are we cringing? Because we hate to tell anyone to play the mind game and purposely price above market to be able to then yield on that price.
That said, psychology is psychology and we are big fans of the behavioral sciences. Right now, they indicate that buyer mentality is still very much in deal-making mode. “It’s insane to pay full ask,” they say. (see our “Wealth Effects” post) Buyers are unwilling to pay asking price simply because, well, it’s the asking price. For many buyers, comps are key and, as long as the price is right, they will bite. For others, feeling like the seller didn’t budge at all or very little is infuriating, disempowering and cause enough to walk away.
In an inefficient market (as is every market influenced by human emotion), it pays to be savvy about your counterparty’s expectations.