Setting your Selling Price too High, Think twice!

 

Meeting other Realtors

You decide to sell your home and believe you know what it is worth. Being a conscious home seller, you schedule appointments with a few or more local Realtors. Each Realtor comes prepared with a Competitive Market Analysis (CMA) on decorative paper and they each recommend a specific listing price.

Surprisingly, a couple of the agents have come up with prices that are lower than you would have expected, even though they back up their recommendations with recent sales data of similar homes in your area, you still remain convinced your house is worth more.

When you cross-examine the third agent’s listing figures, they are much more in line with your own anticipated listings amount and maybe even higher. Rapidly, you become happy and excited and are already counting the money.

This is sometimes called “buying a listing”

If you are like too many people, you pick the third Realtor. This is an agent who seems willing to listen to your input, because they told you your house is worth more. This is an agent that wants to put the most money in your pocket at closing. This is an agent that is willing to start out at your exaggerated, unsubstantiated price, and if you need to drop the price later, you can do that easily, right?

In the end, everyone else does it!

The fact is that you may have just met a very inexperienced or selfish agent engaging in a questionable sales practice called “buying a listing.” He or she basically ‘bought’ the listing by suggesting you might be able to get a higher sales price than the other agents suggested. More likely, the agent who bought your trust is quite doubtful that your home will actually sell at that price. The initial intention, from the beginning, was to eventually talk you into lowering the price.

How come some agents “buy” listings?

There are mainly two simple reasons. A well meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home’s market value.

But in many cases, these agents who engage in this sales practice routinely do this to build a listing inventory. They do not do so for the individual seller, but for themselves, to show other prospective sellers the “listing numbers.”  

The best advice is to stick with the agent who shows you facts (CMA statistical data) that supports the price they indicated. Real estate agents rarely “under-price” homes, so the agent who tells you straight up your home is not worth what you thought, is probably the best agent to sell your home both quickly, and for the most money in the current market conditions.

Traditionally, homes priced correctly the first time will sell faster and for more money than homes that were initially over-priced, on the market for extended periods of time, and those with numerous price decreases.  

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