Using this overpricing technique is usually a major mistake for the home seller. If a house has an inflated asking price, buyers often won't even inspect it because they think the seller isn't serious about selling. When I've asked sellers how their asking prices were determined, I am frequently amazed there is no justification. This form shows recent sales prices of comparable nearby homes, the asking price of neighborhood residences currently listed for sale and the asking prices of recent expired listings that didn't sell. Armed with this valuable information, smart sellers and their listing agents set realistic asking prices so the home will sell within 90 days for close to the asking price.
Most states now require such a disclosure.
The smartest home buyers ask for a copy of these disclosures before making their purchase offers. Some defects are difficult or impossible to correct, such as drainage problems if the house is on a flood plain. Other defects can be corrected, but the seller may refuse to pay because the cost is prohibitive. This open-ended question can be especially revealing. This is an especially important question to ask if the house under consideration is located close to another residence.