To homeowners and real estate agents:
If you agree (or disagree) with the opinion in this article regarding the proper pricing of a home please consider sharing it on your social media.
Realtors (and everyone else) feel free to leave your thoughts in the comments along with your website and contact information!
The subject: Home sellers need to have realistic pricing expectations!
When a homeowner or any property owner has made the decision to sell, one of the major keys to insure a successful process is that they have a realistic idea of what this extremely valuable and emotionally charged asset is actually worth!
An analogy often used compares real estate to the stock market in terms of what a seller can reasonably expect to realize from their sale.
For an investor who owns stock in Yahoo that was originally purchased in 1999 for over $100 a share and who wants to sell it today, they are certainly within their rights to ask their broker to place a limit price of $100 that will be good until they cancel it.
Sadly, however, because the stock is trading today at around $35 a share, they are going to be waiting a long time to realize that $100 price assuming that it actually ever happens at all.
Real estate is really not that much different! For homeowners who may have purchased their house prior to the financial crisis in 2007 for $500,000, they more than likely don’t want to hear that it is only worth about $400,000 today. They know that they want to sell but they also know that they really don’t want to lose money in the process.
This is where a real estate agent has the opportunity to either tell the homeowner what they want to hear or to tell them what is actually the reality of the situation.
The vast majority of agents will be upfront and honest while trying to instill a sense of reality in their potential client while others, the vast minority, may take the listing at the higher price to the detriment of the client.
From an article at MarketWatch by Jonathan Burton, this is the quote from HAS President Michael Haltman in the section of the article titled, “Your home isn’t worth as much as you think.”!
Some real estate agents joke that there are two types of home sellers: Those who want more money than their house can fetch, and those who refuse to back off that position.
Some agents won’t take a listing from a seller who wants more than the market will bear. Other agents aren’t so choosy, says Michael Haltman, president of title insurance provider Hallmark Abstract Service in Jericho, N.Y. — even though overpricing can come back to bite the seller by lengthening the amount of time the house sits on the market.
These agents encourage a seller to have surreal expectations, by promising to get top dollar for the house. The wide-eyed seller then signs with the agent who talked up the listing, and the house comes on the market at the seller’s dream price. But after a few weeks with no serious offers, the agent advises cutting the price.
At that point, Haltman says, a seller has little choice but to drop the asking price to a more realistic level — and is none the wiser to the agent’s tricks. “Human nature is you want the top,” Haltman notes. An agent’s job, he adds, is to set a seller’s expectations, not to follow them and create disappointment later. (Source)