Important Information For Anyone Contemplating the
Sale of Their Real Property
You’ve cleaned the carpets, straightened out the closets, painted the interior, trimmed the hedges and the unmistakable aroma of freshly baked bread is wafting throughout your home. Your house is ready to sell in the shortest period of time at the highest possible price. Good... But at what price? This, above all else is the million dollar question...
Do not overprice. The first few weeks of marketing your home are usually the most crucial. Seasoned buyers, who have been looking steadily (many have already sold their home and are ready to buy), have learned the market well. Price your home reasonably and be flexible. Market conditions often change rapidly and continually. You must keep an open mind and explore whatever alternatives that are presented.
Be sure to listen carefully to all the buyer's terms, not just the price. A potential buyer who will pay your asking price but only subject to the sale of his/her own home, is of no use to you if your needs call for a quick sale. Sometimes, the first offer is the best offer. Over the years, we have observed numerous sellers, who were firm on their price, often refusing reasonable market supported offers and terms, who did indeed sell their house at their asking price -- one, two or even three or more years later, only after the market eventually rose to the level that they were asking. Even worse, sometimes, folks will get deperate and drastically reduce their asking price to below fair market value after being listed for a long time at an unrealistically high level...
OK, So What's the right price??? A seasoned, state certified real estate appraiser will discretely provide you with an independent and completely unbiased estimate of the fair market value of your home or other real property. Your appraiser will guide you to a reasonable asking price and serious buyers will respond enthusiastically. It is imperative that you do not overprice. There are several reasons for this.
The first is obvious. If the price is too high, no one will pay it, and the house will languish on the market unsold until you reduce the price or the market raises to the level of your asking price. Another reason is less obvious. If your house is sold well above its supportable market value to an uninformed buyer, it will not appraise for the selling price and your potential buyer will have trouble obtaining a mortgage. Lending institutions are conservative by nature. Many times when this occurs, the parties are unwilling to agree on a reasonable solution, the transaction is cancelled and everyone walks away having wasted several months. Sometimes it is possible to salvage the situation, with everyone compromising, but wouldn't it have been so much easier, if the transaction were put together initially, based upon solid market evidence of the real value of the property in question.
Be smart, price your home realistically, armed with solid evidence of true market value, and you can be assured of the highest possible price in the shortest period of time.
A few Suggestions, when dealing with realtors, brokers or agents
In any given real estate market there are always some properties that are just simply overpriced. The reasons these properties end up in the inventory of a real estate broker are varied. Sometimes an owner insists on listing a property at a price much higher than it can realistically sell for in spite of an broker or agent's recommendations. More often, in my opinion, properties get listed way over a realistic price because the brokers and or agents essentially "buy the listing".
It's tough competing with many other brokers and agents to list a property for sale. There often is a tendency among sellers to list their property with the agent who tells them their house is worth the most money. Because of this factor, many agents will knowingly inflate the "value" they give to the sellers strictly to get the listing. They figure that even though the house won't sell right away, later, after the seller begins to get anxious to sell, they will be able to convince the seller to do a price reduction. An agent who does this is wasting months of a seller's valuable time.
Suggestion: Be aware that it can benefit a real estate company and agent to have your property listed even if they KNOW it won't sell at the listed price. Here is why: Some franchises teach brokers that "market visibility" and "market share" is extremely important. They teach the brokers that the more signs that are visible to the consumer with their name on them the more business they are going to get. There is also an internal competition for "bragging rights" between brokers in an area to have the most listings.
It also benefits an agent to have his company's sign in your yard with his name rider on it. When buyers see a real estate sign they call and ask for the agent whose name appears on the sign. If that agent gives them the price on a house and it's too high, the agent still has a chance to make a commission by selling the buyers another property. Also, many offices constantly have contests running for agent production. None of the contests I have seen actually measured production as in "percentage of listings sold". Instead what they would do would be to give an agent a certain number of points for every property she or he listed and every sales contract that they got signed. Sometimes the benefits of these contests could be quite tempting, such as a trip to Hawaii or a paid seminar. Basically what these contests succeed in doing is motivating the agents to go out and list as many properties as possible.
The bottom line is many properties that are listed in most areas are priced way too high. Some may well be on the market for many years. These listings are so common that there's a slang term in the real estate industry for them. They are known as "career listings". In other words, the agent will have them listed the entire length of their real estate career.
This creates a situation where the seller who prices his property right ends up paying for advertising and promotion of many properties which have no chance of selling whatsoever. The fact that these properties won't sell means that the sellers of these overpriced properties will never have to contribute a cent to all of money spent by the real estate office on the display advertising, classified advertising, TV, Internet, etc., etc.
These overpriced listings mean that the person who prices fairly won't get nearly as much promotion as they would if all the brokers and agents would refuse to take any property that is priced too high. The way the real estate business is structured I doubt if we will see that happen.
Suggestion: When you are interviewing different real estate brokers or agents, be very aware of what you have just learned about the tendency to take a listing at any price to get a sign on the lawn. The agent who is telling you what you want to hear about the value of your home may be doing it just to get the listing, especially if other agents quoted you lower prices. There is only one truly unbiased person, qualified to advise you with regard to the real fair market value, a seasoned, state certified real estate appraiser. An independent appraiser will discretely provide you with a completely unbiased estimate of the fair market value of your home or other real property.
Good luck and remember, above all, don't overprice!!