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When Your Selling Price Is Too High!
So you've decided to sell your home and you have a fairly good idea of what you
think it is worth. You schedule appointments with three local listing agents who've
been mailing stuff to you for years. Each Realtor comes prepared with a "Competitive
Market Analysis" on fancy paper and each recommends a specific sales price.
Amazingly, a couple of the Realtors have come up with prices that are lower than
you expected. Although they back up their recommendations with recent sales data
of similar homes, you remain convinced your house is worth more. When you review
the third agent's figures, they are much more in line with your own anticipated
value, maybe even higher. Suddenly, you are a happy and excited home seller, already
counting the money.
But which Realtor do you choose?
If you're like many people, you pick Realtor number three. This is an agent who
seems willing to listen to your input and work with you. This is an agent who
cares about putting the most money in your pocket. This is an agent who is willing
to start out at your price; if you need to drop the price later, you can do that
easily, right? After all, everyone else does it!
The truth is that you may have just met an agent engaging in a questionable sales
practice called "buying a listing." He "bought" the listing
by suggesting you might be able to get a higher sales price than the other agents
recommended. Most likely, he is quite doubtful that your home will actually sell
at that price. The intention from the beginning is to eventually talk you into
lowering the price.
Why do agents "buy" listings? There are basically two reasons. A well-meaning
and hard working agent can feel pressure from a homeowner who has an inflated
perception of his home's value. On the other hand, there are some agents who engage
in this sales practice routinely.
Whichever the case, if you start out with too high a price on your home, you may
have just added to your stress level--and selling a home is stressful enough.
There will be a lot of "behind the scenes" action taking place that
you don't know about.
Contrary to popular opinion, the listing agent does not usually attempt to sell
your home to a homebuyer. That isn't very efficient. Listing agents market and
promote your home to other local agents who do work with homebuyers, dramatically
increasing your personal sales force. During the first couple of weeks, your home
should be a flurry of activity with buyers' agents coming to preview your home
so they can sell it to their clients -- if the price is right.
If you and your agent have overpriced, fewer agents will preview your home. They
are Realtors and it is their job to know local market conditions and home values.
If your house is dramatically above market, why waste time? Their time is better
spent previewing homes that are priced realistically.
Later, when you drop your price, your house is "old news." You will
never be able to recapture that flurry of initial activity you would have had
with a realistic price. Your house could take longer to sell.
Even if you do successfully sell at an above-market price, your buyer will need
a mortgage. The mortgage lender requires an appraisal. If comparable sales for
the last 6 months and current market conditions do not support your sales price,
the house won't appraise. You deal falls apart. Of course, you can always attempt
to renegotiate the price, but only if the buyer is willing to listen. Your house
could go "back on the market."
Once your home has fallen out of escrow or sits on the market a while, it is harder
to get a good offer. Potential buyers will think you might be getting desperate,
so they will make lower offers. By overpricing your home in the beginning, you
could actually end up settling for a lower price than you would have normally
received.
Remember those two conscientious agents who didn't get the listing? If your listing
agent routinely engages in "buying" listings, he has probably aced out
scores of other agents in the same way. Being human, Realtors talk to each other.
If they don't like your listing agent, not as many of them will be showing your
home.
In short, you may have ended up with an agent who was good at selling you, but
not good at selling your house. ????And you're going to pay them a commission
for it.
It is human nature for you to want the highest price for your home. However, when
you choose the agent who promises what you want to hear, it often leads to stress
and frustration. Most of the time, it will take you longer to sell your home.
Possibly, you will end up selling at a lower price.
Or maybe as a result of reading this article, you will choose one of the "good"
Realtors in the first place. They are out there, you know! |
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your Real Estate Specialist, our job is to help you..... help you find a
home that meets your lifestyle, location and budget requirements within
the time frame that you need to purchase and occupy the home. 
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