So you’ve decided to
sell your home and have a fairly good idea of what you think it's
probably worth. As an intelligent and sensible home seller, you will
schedule appointments with at least two local real estate agents or
Realtors®
who’ve been sending you their marketing materials for years ;-)
Each agent comes prepared with a
Comparative Market Analysis (CMA) and each recommends a specific
sales price.
Much to your surprise
(and disappointment), one of the agents has come up with a sales
price that is much lower than you expected. Although they can back
up their recommendation with recent sales data of similar homes in
your neighborhood, you remain convinced your house is worth more.
When you interview the
next agent’s figures, they are much more in line with your own
anticipated value, or maybe even higher. Suddenly, you are a happy
and excited home seller, already counting the money.
Which agent do you
choose?
If you’re like most people, you pick the one who gave you the
higher sales figures. You are now convinced this is an agent who
seems willing to listen to your input and work with you. This is an
agent that cares about putting the most money in your pocket. This
is an agent that is willing to start out at your price and 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 an unethical or questionable
sales practice called "buying a listing." The agent "bought the
listing" by suggesting you might be able to get a higher sales price
than the other agent recommended. Most likely, they are quite
doubtful that your home will actually sell at that price. However,
the intention from the beginning was 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 - because that isn’t very efficient. Listing
agents market and promote your home to the hordes of other local
agents who do work with homebuyers as well as exploiting the
Internet to dramatically increase your personal sales force. During
the first couple of weeks your home should be a flurry of activity
with buyer’s agents coming to preview your home so they can sell it
to their clients.
If the price is
right.
If we do not price your home right, very few agents will be
interested in previewing your home - much less bringing their buyers
to see it. After all, Realtors know the local market conditions and
home values, so if your house is dramatically above market, why
waste their time? Their time is better spent previewing homes that
are priced realistically for the buyers they represent.
Eventually, when you
drop your price, your house is "old news" and you've lost that
special moment in time because you will never be able to recapture
that flurry of initial activity you would have had with a realistic
price. Consequently, your home could take longer to sell.
Even if you're fortunate
enough to sell above market price, your buyer will need to secure a
mortgage and his mortgage lender will require an appraisal. If
comparable sales for the last six months and current market
conditions in your neighborhood do not support your sales price, the
house won’t appraise and your deal falls apart (unless the buyer can
come up with the extra cash). Of course, you can always attempt to
renegotiate the price, but only if the buyer is willing to listen or
your home will have to go back on the market.
Once your home sits on
the market awhile, 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.
Why not "shoot for
the stars"?
I agree...depending on
the property and my sellers motivation, I will suggest that they "go
for the gusto" and list their home at a very high price for a few
weeks just to test the waters. Depending on the showing
activity, we will make price adjustments based on a pre-determined
schedule from our comprehensive marketing plan.
So, how is the
listing price determined?
Sellers (although they
may not realize it) are in total control of setting the listing
price. As your Realtor, it is my responsibility to survey the
"comps", evaluate the current local real estate market to determine
and suggest a fair asking price. If the seller doesn't agree, then
we'll usually map out a multi-phased price reduction timeline that
will eventually sell the home. It's important
to note that Real Estate Agents & Realtors do not determine the
price - buyers do.
At the end of day, if we
agree to stay focused on the main objective - which is to
get your home sold at fair market value within a specific timeframe,
then we're on the right track to a successful real estate
transaction.
To
learn more about how I can represent your real estate needs, please call 303-520-3179 to schedule a no-obligation
consultation at your home or our offices.
As a seller, you
deserve
more than
just a sign in the front yard. Let's discuss a personalized and
aggressive marketing plan that will fetch top-dollar on the sale of your
home as well as how you can save thousands of dollars on the sale and
purchase of your next home.
RETURN TO
SELLERS TOOLBOX
Use my
Sellers Toolbox
to learn about things you should consider before
listing
your homes for sale or to
request a FREE comparative market analysis to determine how much your home is worth in
Arvada,
Broomfield,
Denver,
Golden,
Lakewood,
Northglenn,
Thornton,
Westminster
and
Wheat Ridge
Colorado and more importantly, what
factors will influence the asking price of your home. You will also find tips
on preparing and staging your home for sale as well as the various
marketing
services I provide.
