Unfortunately, another agent apparently viewed the home’s value differently and listed the property for an even higher price than before. In other words, this agent told the owners what they wanted to hear, rather than what they should have heard. And in the end, I predict that the home will remain unsold in six months and again, they’ll start interviewing agents, searching for one who will both believe in their price and convince them of some magical formula to get the home sold.
Guess what? Accurate pricing is the ONLY magic formula to get a home sold.
There have been and there always will be agents to tell you what you, as a seller, wants to hear, in order to secure a listing. Why would an agent want to spend time and money to list a home that won’t sell? There are many reasons. One is prestige—it looks good to have an expensive home you can advertise in in magazines and on the web if you are trying to brand yourself in a particular price category. The agent might also secure buyers from the home’s signs and advertising to whom he/she won’t sell the home in question but perhaps a more accurately priced home. And then there are some agents just like to collect listings, believing in the law of averages which is, if you have enough listings, one will probably sell. After all, you can’t get a price reduction on a home you don’t have listed. Finally, there are unfortunately some agents out there who don’t know the inventory or how to price accurately and so they’ll just agree with the seller’s price and hope for the best.
I hate when this happens, it makes all real estate agents look bad. But the question I’d like to answer for you, dear home seller is, how can you make sure that the price your agent is prescribing is a reasonable one and not one created just to help him/her get the listing? How can you make sure you are not purchasing “hope” instead of real “help”?
First, expect your agent to show you all comparable sales for homes like yours (same or similar square footage, similar acreage, similar number of baths and amenities, like finished basement, # of garage bays, updated kitchen, etc.) that have sold in the last six months. They should be in the same school district and ideally in the same neighborhood (and same elementary school). If those comps are not exact, make sure the agent has made adjustments in pricing to make them comparable, the way an appraiser might. If an agent suggests a high price, make sure they have a comparable SOLD listing to back it up. Home listings that are active (unsold) at that price don’t count…those sellers could be totally unrealistic and you must base your home’s listing price on what has sold and what appraisers have considered prices worthy enough to extend mortgages to the buyers of those homes.
Selling a home is a combination of a beauty contest and a price war. So the second thing you should do is ask to look at every competing neighborhood property on the market that’s like yours. But here’s the trick: look at the listings with a buyer’s eye but without looking at the prices or tax amounts. Honestly consider where your home stacks up, which obviously should be somewhere between homes with fewer amentiies and homes that have more to offer. When you’ve decided where your home should be positioned against the other homes, only then look at asking prices and strategize accordingly.
Selling a home is a stressful time. Don’t prolong your time on the market by “starting high” with an eye to bringing the home’s price down later. The buyers usually check within a $25,000-$50,000 range on the Internet and if you’re outside of that range, they’re not even seeing your home, so the idea that “they’ll make an offer if they’re really interested” isn’t a realistic one since they won’t even know your home listing exists.
Also, the first three weeks on the market are critical; it’s when anyone who’s been waiting for a home like yours is going to come to see it. Lose their interest upfront with an overinflated price and you might never get them back. And when you do finally reduce the price, people are going to be wondering why it was on the market so long. Or they’ll think, “It’s been on the market awhile. The sellers might be desperate by now, let’s lowball it!” If emotion is what sells houses, consider which house will excite buyers more—the one with everything they want that’s just come onto the market or the home that’s got everything they want but has been on the market for six weeks?
One last thing to remember: pricing is fluid. A good agent will keep an eye on the competition. A price that was decided upon when there was no competition on the market may not hold water if suddenly ten homes come onto the market that are just like yours. Be prepared to tweak. Your home may be your largest financial asset—don’t waste time and lose the market by believing in a “wish” price instead of a “real” one.