My colleague in New York, Paula Hathaway, wrote this excellent explanation of the effect of overpricing a listing. The real estate market is different in 2009 and 2010 than it was in 2007, in San Mateo County and the Silicon Valley as well as nationwide. Even with our low inventory, we have many examples locally of properties that were overpriced initially, and not corrected quickly.
If you are thinking of selling your home, call me for details.
How are you handling sellers who want you to over-price their homes? It may seem that the owner who insists on a couple of hundred thousand more in their asking price should be accomodated, especially if you are not the only broker on the hunt. But pricing properties properly should be priority #1
As we all know, if a seller wants to sell their property sooner rather than later, you are really doing them no favor if you are not totally straight with them---things are not like they used to be in real estate. Most sellers have an idea of how the recession has affected real estate prices; most however, still believe their house is the best house in the neighborhood and should get more money than the next guy's. This is not the time to acquiesce just to get the listing.
HOW ARE YOU HANDLING SELLERS WHO WANT YOU T O OVER-PRICE THEIR HOMES???
This is where we come in as professionals; it is first and foremost the priority of all of us to price properties properly. If we don't inform the seller that his price has to be the most sharply priced in order to sell before his competitors, we have not done our job. Here's what I do to educate my sellers:
- Always do an in-depth comp search---go as far afield as possible to make sure your final price decision is achievable.
- Make an appointment with the seller to take him out and drive past recently sold properties---bring along all printed materials that substantiate your information.
- Make it clear that you must be in control of where the price will be--you will listen to them but you need to have the final say on the price or you won't take the listing.
- Give him/her a quick tutorial on how an internet search is done by a customer--just in case they have never looked. If a price is just a few thousand dollars over the available comps, they won't come up in searches and they won't get the potential buyers attention.
- Give the seller other reasons to choose you to market their property---including testimonials from other clients/customers.
If you have done all of the above, you should have no problem telling them all about the houses you have listed--and sold recently!!!
My last experience with an over-priced property was a disaster--and I lost my customer because he was left with the idea that I was not working on his behalf. I was handling the buy side of a deal that was listed by someone in my office who has established that he "always gets the highest prices for his sellers!" This agent is on the record for over-pricing properties to achieve that---It used to work....in a "hot" market.
Now there is no way that an over-priced property will even get shown, much less get sold!My buyer was reluctant to bid on the property which was priced $2million over the market--but he went ahead and told me to put in his bid. I did and the listing agent presented it--I was not privy to the negotiations with the seller but the best the listor got was a small drop in price---this was last year. The property is still there, and still over-priced! No other offers and no compromise to get the house sold on the part of the seller....My buyer threw up his hands and walked away after coming up significantly in his offer and getting a low ball response.
PROPERLY PRICING A PROPERTY IS CRUCIAL TO GETTING IT SOLD!! This is no secret---there has to be reason to list a property in this market--This is no time to "test" the market, since almost everyone who is buying now is looking for a good price and in most cases that is the only way deals are getting done!
GETTING THE DEAL DONE!
Paula I. Hathaway, LBA, Prudential Douglas Elliman
Top Producer, Diamond , Gold and Chairman's Circle Awards