Every now and then I'll encounter a home seller that when they say "I want to sell this house." they really mean it. They listen to my rationale for recommending a price. They look at the comparable sales. They make a decision to price the home so it will attract the largest number of potential buyers through the front door and provide an offer that will end with the sale of the house.

A lot of the time, I encounter home sellers who will say "I want to sell this house." and what they really mean (but don't say out loud) is "I'd like to sell this house if I can get the type of money I need to [fill in the blank]." Usually the fill-in-the-blank has nothing to do with true market value, comparable sales or much of anything else other than something the home seller would  like to accomplish outside of selling the house.

It could be they need a certain amount of money to buy the next house or pay for a retirement living arrangement.  A lot of the time it's really about wanting some money to have fun or feeling that it's due to them for making whatever improvement they have made to the house over the years they've lived in it.

Sometimes, a home seller will price the house aggressively and when a good offer comes in sooner rather than later, they begin second guessing the pricing strategy.  "Hey, if everybody's house is sitting on the market for 6 months, how come I got an offer in one week?" (as if this was a bad thing). Or, "This is a full price offer. It must have been priced too low." What I like best is, "People (i.e., all my friends and co-workers who are not real estate professionals) tell me 'Realtors just want to sell the house'".

Yes, as you can tell, I have a little bias here. When I hear the "Realtors just want to sell the house." I would like to ask, "What do you want to do?  Just let it sit on the market and have total strangers continue to walk through your home at random moments?"  Of course, the implication is that Realtors are most interested in setting the price as low as possible to sell it as fast as possible to pick up that big commission check.

The flip side, of course, is that when the house is priced too high and it sits on the market too long the Realtor is suggesting the high price so they can get a bigger commission check.

Luckily, I don't run into too many clients that like to second guess the selling strategy.  When I do, though, it drives me crazy!  I like to think I can tell who just wants to test the waters and who is really serious about selling their home to move onto the next chapter in their lives.  Sometimes, I get that part wrong. When I do, it's a doozy.  Having to listen to regrets and sellers remorse and the greed starting to kick in makes me want to run screaming from the room.

But, hey, if it was easy anyone could do it.

 

 
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5 Comments on Second Guessing the Price

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Ken:  That is a vicious cycle and one that only other people in this profession can appreciate. Your job is to sell the house, and, at times like this, they should be very happy with that result, particularly if you have the comps to back up your pricing rationale. 

7:30am • #1
843,392 Points 213 Featured Posts Localism Sponsor Outside Blog Hit Router

HA!  Recommending a high list price will produce a significant increase in commission. 

Agents recommend high list prices to get the listing.  They never expect it to sell at that price so have no expectation of a higher commission.

Sellers who suspect that agents do what they do to collect a slightly higher commission are not folks I want to do business with.

We've had a number of sellers who will pay commission only on the contract price less buyer credits.

That's what we call "cheap".  But, we persevere.  Fact is, they have no respect for what we do or they wouldn't be so insulting. 

7:34am • #2
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Claudette - Amen.  When I heard, "Realtors only want to sell the house."  I wanted to go, "Like, duh!"

Lenn - Yep. Unfortunately, sellers don't quite grasp the concept of agents "buying a listng" and then hanging loose until the inevitable price reduction comes. Most will just see dollar signs.

7:42am • #3
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As always, my dear friend, you have the perfect image for the post!  You are so good at this extra step of taking a well-written post and just kicking it out of the ballpark with an awesomely apt photo.

I think there's just no way to win in terms of pricing.  Quick sale - we underpriced it.  Long, tortuous, drawn out process - we learned a lot along the way and the market just stinks!  I so feel for you in these situations, just as I empathize with the sellers.  A cherished home should be priceless.  It just ain't though, and more's the pity!

9:28am • #4
609,592 Points 80 Featured Posts Outside Blog

The key is always their motivation.  More times than not they are fishing for price.

9:34am • #5

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