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Real estate agents across the country are learning new ways to sell homes and satisfy sellers in a real estate market different than any other. Banks are in control of the most sellable real estate. The rest of the inventory consists of short sales and the occasional relocation sale. As a real estate agent with 15 years of experience, the toughest part of my job is explaining to sellers that the most important goal for them is to quickly determine what the real value of their home is.
Most sellers start the process of selling their residential property the same way. Sellers shop for an agent that has experience, sounds aggressive, and believes in getting top dollar for the property. The homeowner's focus is on the agent being in agreement with the homeowner's needs as it relates to price or value. Unfortunately, 99% of homeowners I have spoken to in the past have a value determined for their home before I walk in the door. This is a huge problem for sellers and usually devastates the sale because the sellers are almost always wrong. It is natural for a seller to hope their home is worth more, but sellers need to focus on finding the value instead of starting high and hoping for the best.
Take a moment and imagine being a real estate agent. A homeowner calls and expresses interest in selling their home. You, as the agent, are excited to have a new listing and can't wait to get started. You set an appointment to meet the seller and tell them "why they should list their home with you". Actually, this is an interview and you don't want to blow the interview. You want to be hired. Be careful because if you tell this homeowner that their home is worth less than they think it is, you will not get the job. Most agents tell the homeowner they (the agent) can get top dollar. Most agents agree with the owner when the owner tells the agent what they need the price to be. If the owner will not tell you what their opinion of value is, start high. After all, if an agent tells the owner a high number, they will actually be flattered and hire you (the agent). This is how the listing process goes most of the time. The sellers hear the value they need to hear. This is not how you quicklyfind the real value. However, this is exactly how sellers set themselves up for disappointment and lose money in the sale of their home.
I am not writing this to explain how to find the right agent to help you sell. I have faith that homeowners will find a trustworthy realtor that does not use an inflated price to get the job. When selling a home, the most important goal is to find the value of your property. This concept is a little difficult to digest because sellers are 100% attached to the outcome of the sale and this creates fog in reasoning for most sellers. There are countless factors that contribute to opinion of value for a homeowner. None of these factors really matter in the end because the real value is determined by what a buyer is willing to pay. Sellers are in control of their price, but not in control of the value of their home. Most sellers get confused by this. Buyers determine what a property is really worth by outbidding the homeowner in price. I repeat, buyers determine what a property is really worth by outbidding the homeowner in price. Some sellers actually outbid the buyers. When this happens, the seller (maybe unknowingly) decides to stay in the home, keep it, and not sell.
How does a seller quickly determine the value of his home? The answer to this question is complicated because most sellers don't really want to know the answer. Sellers do want to know what their home is worth, but the desire for that number to be a higher number is overwhelming. It is similar to knowing there is bad news coming, but not wanting to deal with it right now. If Plan A is reality, most sellers would rather exhaust Plan B and C first.
Sellers should have a discussion with one or more professional realtors and ask the question, "What should the price be in order to sell in 60 days?" The answer will be much different than if the seller asks the agent what the home is worth. A great follow up question is, "so what I hear you saying is my home will sell in 60 days if listed for sale at that price?"
Keep in mind sellers should be trying to find the real value quickly. Routine price reductions of $10,000 will have a positive impact on showings and offers. For example, if the seller prices the property at a fair or even aggressive price and proceeds to lower the price every 2 weeks by $10,000, the seller should see signs of interest in the property. Take this idea a little further. Most sellers have a bottom line when pricing their home. Don't be afraid to continue price reductions well below the bottom line. It is not a comfortable thought to let that price fall until an offer comes in, but this is exactly what we are hoping for...an offer or reality. What I am about to say next is very unorthodox, but hear me out. Consider letting the price fall until you get an offer even if you do not plan to sell at the lower price. You are not under any obligation to sell your home to any buyer until you have signed a contract with that buyer. This means you can put your home on the market for sale and change your mind even if you have 10 offers. The only time you are obligated to sell your home to a buyer is after you have signed the contract for sale and purchase. The point is to find out what buyers are willing to pay for your property. Once you have answered that question with an offer in hand, you get to decide whether you still want to sell your property. Countless sellers have their homes on the market for 1 or 2 years and still have no idea what a buyer is willing to pay. They only know what buyers are not willing to pay because the price never stimulated an offer at all.
In summary, sellers should focus on attracting buyers to the property with a very competitive price. Curb appeal is very important, but buyers demand good value with great curb appeal. Sellers may instinctively argue with the last sentence and in the end, those sellers might outbid the buyer for their own home. Sellers should explain to their agent that they want to know what buyers are willing to pay and find this answer very quickly. An appraisal probably won't explain what the current buyers are willing to pay. The best way to find out what buyers are willing to pay for a property is to stimulate an offer or two. If you don't like the offers, don't sell. Hopefully, it will take you only 60 days to determine the real value.
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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.