Giving sellers the hard truth about pricing their home

One of the things that confuses me about many real estate agents, is their seeming inability to tell a potential seller the truth about their listing.

Don’t get me wrong, I understand how hard it can be to inform a new potential client that their beautiful home is worth 15% less than they think it is.

I have walked out the door without a listing knowing full well the next agent interviewed will have it, simply because they will tell the seller whatever they want to hear to get the listing. Well readers, today I want to tell you why that is a huge disservice to both our clients and to our industry.

As any of you who have sold a home know, getting your home prepped to sell and then maintaining it at a level which will allow the house to show well can be very stressful and exhausting. The longer it is on the market, the harder it gets. Well when a home is priced out of market, even by as little as 10%; it is going to be on market until that price comes into the range that buyers are paying for that type/size of house and in that area. It is that simple. That adds up to more time you have to keep your house like no one lives in it.

Not only will a seller who is priced too high at the beginning of the listing likely be on the market for an extended period, but they will likely end up selling for less than they would have if they had just priced the home properly to begin with. You see, when a buyer learns that a home has been on market for more than 3 months or so two thoughts always cross their mind.

First, they make the assumption that there is something wrong with the home and as a result of that, they scrutinize it more closely than they would otherwise. This causes them to eliminate homes they would otherwise consider from their field of options. This gives the seller less potential buyers, which equals a weaker bargaining position.

The second thought they frequently have is that the seller is well primed for some hard ball negotiations. The longer the home is one market the more ridiculous low ball offers you will see. Sure you don’t have to accept any of them, but if you need to sell to accomplish a goal you are likely to start considering them. When that happens, a more reasonable offer that would not have been enough in month two of the listing suddenly seems like your only way out and you might just take it.

So it is clear, listing a home above its market value costs the client valuable time and money. So why do agents do it?

The truth of the matter is, it happens because the agent knows that a sign in your yard is worth one or two buyers for him whether he sells your home or not. So whether they price too high to suit a stubborn client or do so as a matter of practice to ensure they always have a lot of live listings…the end result is they are doing it to improve their short term business.

You might ask at this point, “If it helps their business, how does it hurt the industry?”

Well, its a matter of trust. You see, we live in a time where people are no longer trapped into using a Realtor. Sure, if someone lists as a for sale by owner they are likely to net less on the house, spend hundreds of hours trying to market a home without a plan, and run into many legal issues that a good broker will easily avoid; but we are talking about selling what is usually that individuals largest asset and if they can’t trust an real estate agent to respect their fiduciary responsibility…well then why shouldn’t they take the risk of losing a bit of time and money. Especially, when the perception is that they will lose more of both by using a professional.

The worst part is when one agent does this, it reflects on all of us.

So how do we fix this?

This is just as simple as everything I have laid out. We tell the hard truths.

We have the data. We have the expertise to price the home within its market value. All we have to do is tell the client the truth and let them make a truly educated decision as to whether conditions are right to market their home for sale.

This is already policy for me personally, on The Giles Team and at Your Realty Link. Come see us if you want to get your home sold for its best price and in a timely manner.

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About Robb

A husband, Dad to 5, and Grandpa to 9. US Navy Vet. 18 Year Postal Employee turned full time Realtor. I enjoy a wide variety of things, but you will find that here I mostly write about Indianapolis, government/politics, recent news, and whatever book I am reading or have just finished at the moment.
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