Ask for the moon! Who knows, some poor smuck may come along and pay it.
I've always been amused by the 'ask for the moon' pricing strategy. Some brokers in particular seem to embrace it. While in theory on the surface it sounds like it would be a way to get the highest price possible (thereby both getting the seller as much as possible, and the broker the highest possible commission), I don't know if it really works all that well in anything but an insane seller's market.
There's a broker in New England (who will remain nameless) who I've talked with many times over the past >20 years. Very polite, courteous, responsive, knowledgeable, and well-known locally. Their approach has always been ask an absolutely b@tsh!t insane crazy price to start, and then very slowly, lower the price over a long period of time, and be relatively firm at each price point. Kind of like a 'Dutch Auction.'
I've talked with them about it a few times, and their response is, 'you can always lower the price, but it's hard to raise it.' Fair enough. But their approach often seems counter-productive, and has turned me off to dealing with them.
Just one example, there was a boat they had listed a long time ago, for $399k. I thought it was worth low $300's, and offered $325k. I was laughed at and told 'even $375k probably wouldn't buy the boat.'
That boat was listed on yachtworld for six (6) years. The last price I saw it listed at was $249k, and I understand it finally sold for $225k - $100k less than I offered, six years before.
Another boat they had listed for $895k. I saw the boat at a local boat show. It was beautiful and pretty much exactly what I wanted. Again I thought it was way overpriced. I thought it was worth low $500's, and said I would be willing to offer $525k, maybe as much as $550k if they twisted my arm.
Again I was laughed at and told 'not even $750k would buy the boat' and that the price 'had to have an 8 in front of it. The boat was for sale for two (2) years, and finally sold for $495k - again less than I offered, two years before.
Maybe the 'ask the moon' approach works most of the time. Maybe it generally works in a seller's market. Maybe my experiences are unique to the kind of boats I'm interested in. But I suspect not. About a year ago the same broker listed a boat for $399k. I looked into it as one of the last used boats I considered before throwing in the towel and ordering a new one. I liked it, but it had needs, I expected to be putting $150-$200k into it, and said I'd be interested somewhere in the mid $200's. Again I was rebuffed.
The boat is still for sale, now listed at $199k.
It got to the point where regardless of how interesting a boat seemed, I would no longer bother with that particular broker, because I just didn't want to play the game. Life is too short, and my remaining time is too limited for that kind of nonsense.
Except in a crazy seller's market, sometimes the first offer you get is the best offer. Sometimes, it's the only offer.
Anyone else have similar observations?