That’s right. You don’t get to name your price — The buyers do. Once you hire a listing agent, one who is familiar with your market, he or she will know the price that your market will bear.
Ideally, your home should be listed at market value, and with the help of a little staging, photography, and digital marketing, it should come off the market immediately thereafter with multiple offers.
Unfortunately, not all real estate agents are candid. And in order to get hired for the job, the agent will oblige, knowing that your home is over-priced. To make matters worse, the Listing Agent will have no price reduction plan in place as a backup option. So the home sits idly with no offers or showings for months on end. The Sellers blame the Listing Agent for not selling the home and the Listing Agent blames the Sellers for ignoring his advice. This is a lose-lose situation for everyone.
Have a price reduction plan in place. So for instance, if we agree that your home is priced 2% too high, then we will agree to lower the price by 2% in 2 weeks if you have no offers and less than 10 showings. This price reduction plan protects you from having a home that sits on the market for months on end with little to no activity. It will ensure that you get the most for your home in the least amount of time.
When choosing a real estate agent, most sellers don’t realize how important it is for a home to be priced correctly the second it hits the market. This is because a home that hits the market is not like a glass of wine that gets finer with time. It’s more like a glass of milk that spoils day by day. Once your home debuts on the market, it always goes down in value, not up.
Furthermore, even if you do get a buyer who is crazy enough to over-pay for a home, once the bank sends out an appraiser, get ready for the kibosh. No lender will ever fund a loan for more than what a home is worth — Especially now. The lender will tell the buyer that if they want your house, that they will have to come out of pocket for the difference. And this is usually an expense that the buyer can’t fork.
In the buyer’s eyes, there must be a valid reason why the home hasn’t sold. Perhaps there are skeletons hiding in the closet or bones buried in the backyard. And if it sits for too long, it gets even worse. This is when investors begin coming out of the woodworks with low ball offers, adding insult to injury.
If the listing agent is great, a Seller should always adhere to the advice that a Listing Agent gives them. And to be fair, a Listing Agent should never (ever) be coerced into taking an overpriced listing. If you hire an agent that agrees to your pricing, knowing that your pricing is too high, expect disaster to ensue. If your agent isn’t assertive with you, how can you expect them to be assertive when marketing your home, protecting your interests, or finding you a new home?
According to the National Association of Realtors (NAR), 89% of the population opts to hire a Listing Agent to help them sell their home. That means, 11% opt for the For Sale By Owner (FSBO) route, usually because they are attempting to pocket the commission themselves instead of hiring a Listing Agent. But studies show that selling your own home is often a mistake.
After giving it a go, they’re usually frustrated, upset, and very happy to take on the advice of an expert — Which is totally understandable after expending so much effort. And most FSBO’s say that they wouldn’t do it again.
So it must be done right. If you, or someone that you know, needs a Listing Agent, feel free to reach out to me any time.