Selling Your Property
Meeting With Real Estate
Professionals
Amazingly, a couple of the Real
Estate Professionals 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.
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
Real Estate Professional comes prepared with a
"Competitive Market Analysis" on fancy paper and they
each recommend a specific sales price.
Which Real Estate Professional
do you choose?
If you’re like many people, you
pick Real Estate Professional 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, 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.
What Happens Behind the Scenes
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 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 Real Estate Professionals, 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.
Dropping Your Price...Too Late
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 six months and current
market conditions do not support your sales price, the
house won’t appraise. Your 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 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.
All articles © 2000
RealEstate ABC. No articles may be reprinted or
displayed without permission.
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