The Realtors I work with are true professionals. They go into a complete, full depth analysis of your property before they give you a valuation or recommended asking (list) price. This number is what they feel the “market will reasonably offer” given the features of your home and the current market conditions in your immediate area. Keep in mind, I’ve been selling investment homes for over 20 years, so I am very familiar with the process and being on the sellers’ side. I’m not only a Home Stager, I sell a couple of houses a year on average myself!
First of all, there will always be Realtors who will start off suggesting a higher list price than other proposals you receive. Their “sales” strategy is to lock you in to a listing agreement for as long as possible and then convince you to keep dropping the price until the home sells! These are NOT the Realtors I work with or recommend to my clients. However, as with every industry, there will also be some less than desirable people looking for a quick buck. Just beware, once you sign a listing agreement with someone it is not as easy to fire them and hire someone else. When you are presented with an offer to list your home and the price is substantially higher than other proposals, get the dollar signs out of your eyes and start asking hard questions. Such as why so much higher? Marketing strategy? Expected days on the market at this price? Comparable properties that have sold IN YOUR IMMEDIATE area at this price, and HOW MANY and WHAT YEAR? The comparable should be within the last 6-8 months and in your immediate neighborhood and be a similar age to your home and have similar upgrades and should consist of more than just one property that sold over list in a bidding war. Beware, the goal is to dazzle you with a BIG number and lock you into a listing agreement contract and then drop the price until it sells.
The number one lesson is to choose your Realtor very wisely! It would be reasonable for you to ask for a list of their sales over the last 3 or 6 months and find out what the list price was and what the home actually sold for! This will weed out the Top Professionals in their field! Thankfully there are many excellent Professionals to choose from!
When it comes to setting the list price, tryst your Realtor. Now if your Realtor recommends a price of $450,000 and you insist on $460,000, you are basically fishing. Some Realtors will proceed at the higher list price in order to appease their clients. However, they usually set a time limit on it, say 2-3 weeks. If there is no interest at the higher price, then the agreement is to drop it to the Realtors’ recommended price. This accomplishes 3 things: First, the Seller won’t spend the rest of their life wondering “could we have sold it for a higher price”? Second: When as offer does come in, it’s likely to be that much closer to the price the Realtor recommended in the first place! Third: When a property sits on the market for a long time, people begin to think there is “something wrong with it”. This turns people away and can in fact encourage low ball bids from investors. Neither option is particularly great for the seller.
Finally, the recommended list price is the price!!! That is the sale price your Professional Realtor feels your home will best attract a buyer and potentially sell somewhere in that price range. Please, please, please DO NOT add Realtors commissions onto the recommended list price! If you Realtor suggest $499,000 – keep it at that number! Don’t bump it up to $514,000 to cover the cost of Realtor fees!!!! Search engines use price as one of the MOST critical screening factors. If a couple is looking up to $500,000, your property will never come up in the searches!!! The valuation of your home is what it is worth! Buyers will not pay more than it is worth because you listed with a Realtor! This is just another common example of over pricing yourself! Don’t’ do it! Realtor commissions are a cost of the sale process and need to be included in the sale price.
By pricing your home at Market Value + Commissions, you are telling all other Realtors and Buyers that you expect the BUYER to pay for the Realtor commissions! You’ve just turned off a lot of buyers who may have been interested in your home. Let’s face it the market has become much more competitive. Buyers would rather deal with a Seller who is reasonable and will be easy to work with. Setting your price + Commissions just tells everyone you are very demanding of the buyer and very inflexible. Off they go to look at the house down the street while yours sits with no showings…..sigh. Chances are, when you receive an offer it will be below asking price anyway, because your home isn’t worth that much. For the months you’ve kept it listed at the higher price, you continue to pay mortgage, utilities, insurance, taxes, interest on your mortgage, plus any staging costs… so did you really end up any further ahead after taking these costs into account? Once you take the additional carrying costs into account, did that extra $14,000 in asking price make you money or cost you money with the additional time it took to sell, if it did sell?!!
When it comes down to it, TRUST your Professional Realtor! They understand the conditions in the market and can best advise you how to get a reasonably quick sale for the best possible sale price. After all, that’s what they do every day. You would never dream of going to the grocery store and having a “mark-up” for the transport company that delivered the groceries! Yes, the cost of transporting your groceries is built into the sale price, just like the Realtors’ cost of selling your home is built into the sale price of your home! Remember, you want to attract Buyers and keep them away. Trust your Professional Realtor for a quick and happy sale process.