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When you bought your home you probably used the services of a real estate agent. You found that agent through a referral from friends or family, or through some sort of marketing or advertisement. The agent helped you in many ways and eventually you found the house of your dreams, made an offer, closed on it, and finally moved in.
For some reason, the time has come to sell your home and you need a real estate agent again. Many home sellers tend to think that all real estate agents are similar -they perform their duties in the same manner and have the same standards of service.... Not True!
Being a sensible seller, you decide to interview several real estate firms/agents for the job of successfully getting your home sold. At this point, you have a fairly good idea of what you think your home is worth and expect the agents you are interviewing to come up with a similar value range for your property. As interviews begin, each Realtor comes prepared with a "Competitive Market Analysis" (CMA). Each report contains information on available property comparable to yours, sold property comparable to yours, property under contract comparable to yours, and property that failed to sell comparable to yours within a specified distance from your home and trailing up to 6 months. This data is meant to justify the value range for your property indicated by the Realtor.
As you are interviewing Realtors you encounter the following..... Amazingly, a couple of agents have come up with prices for your home that are lower than what you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced that your home is worth more. When you interview the third agent, you find that their figures are much more in line with your own anticipated value, or maybe even higher. Suddenly your smile gets wider, your eyes get bigger and you start counting that extra cash in your mind and making plans on what you are going to spend it on.
If you're like most people, you probably chose to work with agent #3. In your eyes, this is an agent willing to listen to your input and work with you, an agent that seems to care about putting the most amount of money in your pocket... someone that is willing to start out at your price and then beat you up on price later - expecting a price reduction in order to get the home sold..... Right?
The truth is that you may have just hired an agent that lied to you. The agent lied by suggesting that you may be able to get a higher sales price than the other agents recommended. Most likely, agent #3 is quite doubtful that the home will actually sell at this price - the intention from the beginning is to eventually talk you into lowering the price...... Wondering why some agents run their business this way?
There are basically two reasons why a Realtor would lie about their valuation. A well meaning and hard working agent may be feeling the pressure from a homeowner who has an inflated perception of what the home is worth. On the other hand, there are some agents who routinely engage in this sales practice. At the end of the day, both agents have done you a great disservice.
Starting out with too high a price will undoubtedly add to your stress level and it will not sell in today's market. Real Estate inventory is high and the number of buyers that are able to buy is low - if your property is overpriced, there is another one down the road that compares to yours that is priced correctly and that one will be the one that gets sold! Value is always determined by the buyer - what the buyer is willing to pay for your property in comparison to the others they saw the day they shopped for a home.
An overpriced listing will drive fewer agents and their clients to your home. After all, we are Realtors, and it is our job to know local market conditions and home values. If your house is dramatically overpriced, why waste time? Time can be better spent looking at properties that are priced realistically.
The first 3 weeks is the most crucial time of your marketing period..... the home is new on the market and you have that flood of initial interest and activity. All the marketing material should have already been disbursed and most of the networking to generate interest should have been done. If you start out with a high sales price, and then drop it later - you miss out on countless buyer opportunities therefore increasing the total number of days your home remains on the market without selling. You will never recover that flurry of initial activity.
Even if you do successfully sell at an above market price to an uninformed buyer, your buyer will most likely need a home loan and the lender requires an appraisal. If comparable sales for the last 6 months and current market conditions do not support your sales price, the house won't appraise....... Your deal will fall apart unless you renegotiate price with the buyer...... but only if they are willing to listen.
It is human nature to want the highest price for your home. However, when you choose the agent who promises what you want to hear, it will lead to stress and frustration. As I stated before, it will take you longer to sell your home and you won't sell it until the home is priced accordingly. Here's a tip; If your home is being shown regularly and no one has presented an offer...... it's a definite indicator that your home is overpriced.
At Century 21 we are regularly trained on market trends and conditions to help us determine a range of property value for your home. Our goal is to make all of your real estate transactions as smooth as possible and help you successfully meet your real estate goals. My company and I are great candidates when considering a professional real estate team. You can always count on us for the most up to date market information. Trust us; we will not deceive you when recommending a price range for your home. On the contrary, we will be honest and respectful of your time, and will inform you of the market and how your property should be priced in order to get it SOLD!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.