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Pricing your Home to Sell!!
So you’ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who’ve been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend 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 interview the third 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.
A Sales Practice Called "Buying a Listing"
If you are 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 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, everyoneelse 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 some agents "buy" listings this way?
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.
What Happens Behind the Scenes?
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 directly to a homebuyer. That would be inefficient.
Listing agents market and promote your home to the hordes of 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 buyer’s 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. After all, 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. Also, the real estate market is ever changing and now more than ever, buyers are educating themselves to the process. No longer are the "used car salesman" mentalities able to make a living in real estate, or if they are, they may find that their days are numbered. Consumers more than ever before are recognizing the importance of doing some homework before buying or selling any real estate. Because of this increase in buyer sophistication, it is becoming increasingly important for the seller to price their property correctly.
What about the Comps?
Today’s buyers are asking for a Comparative Market Analysis (CMA) and the professional agents are providing these analyses before being asked. In days gone by the agent might just quote what other properties were selling for in the neighborhood in which the buyer showed interest. This is in no way indicative of fair market value. Market value is based upon what a buyer has actually paid for a property. A Comparative Market Analysis should reflect sales of like properties in your area within the last 3-6 months. Extraneous factors such as replace ability of property, uniqueness of location, etc. may be factored in to the equation. However, the foundation of the Market Analysis is the comparatives (like-properties in same area and their recent selling price).
Because of these factors and increased buyer sophistication, it is increasingly important for you to price the property correctly. Property values are NOT dictated by what you have invested in the home, nor by what you need to receive from the property. It is your Agent’s job to tactfully prepare you for these facts and help you realize the importance of pricing the property at market. When priced accurately, many properties sell immediately because the first month on the market is typically the time of most activity for new listings. If your home is priced correctly, properly marketed, and staged for showing, the likelihood of a quick sale is greatly increased. Many times sellers eventually lower their price to market after the best buyers have already dismissed the property as being overpriced, and the seller ends up expending more money and time because the property was not correctly priced immediately. It is important for those sellers to keep in mind that they are paying interest on the mortgage each month that they continue to carry a home that does not sell. Please remember, Elena Corbett aims to sell your home as quickly and efficiently as possible!
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