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I have to "sell" my asking price 3 times????

Mr. or Ms. Seller: Yes, you do have to sell the asking price for your home 3 times
or you run the risk of the below scenario happening to you, especially in Macomb
County Michigan.


1) You have to sell your price to attract a buyers agent. If you overprice
     the home I can guarantee that an agent working on behalf of the buyer
     will put it to the bottom of the list of homes to show their client.

     Buyers agents in Macomb County have more homes available to
     them and their clients to view than we've had in recent years.
     The agents in Michigan are typically weeding through close to
     100 homes in some instances that meet their clients criteria.

     If you overprice your home from the start the agents will not consider
     your home for their clients. It is that simple.   Please don't make
     the mistake of thinking that your home will be shown if it is overpriced,
     and that buyers and their agents can read your mind about "Just
    bring me an offer - I'm negotiable."   Even if you ask your agent
     to note that in his/her remarks the likelihood of a buyers agent
     seeing that is next to nothing.   We won't even get that far because
     we won't be pulling up your full listing information if it is priced too
     high to begin with.

2) You have to sell your price to the buyer. Buyers are savvy and
     educated. The typical buyer has already done their homework
     prior to engaging a real estate agent on their own behalf.
     They know the real estate market and the general values of homes
     in the neighborhoods they are interested in. They don't want to
     become involved with an overpriced home and lengthy negotiations
     with a seller. Why not? Because the home down the street is
     going to be very similar and priced well.   They don't have to
     consider your home. One more thing to consider: A buyer does
     not want to insult you with what you may think is a low offer.
     Most buyers I work with will ask me "Will this insult the seller?"
     Buyers aren't your enemy - They want to work with you. They
     also don't want to be dragged into a potential "left with bad
     feelings" transaction.

3) You have to sell your price to an appraiser.   Let's say you do
     receive an offer on your overpriced home. The next step in the
     purchase process is for your buyer and their mortgage representative
   to start working their way through that obtaining the loan. An appraiser
     will be hired by the mortgage lender. He or she will study comparable
     sales for your home, neighborhood, square footage, recently sold
     prices, etc. When the appraiser realizes that your home is overpriced
     the purchase agreement that you thought you had on your home will
     almost certainly be "dead". Why? The lender of the loan will not loan
     money to a buyer on a home that is not worth the asked for amount
     by that buyer. Unless the buyer is willing to come up with the cash
     to make up the difference between the appraised amount and your
     agreed upon purchase amount you will now have your home back on
     the market. The $30,000 you put into your basement? It isn't worth
     $30,000 to the appraisor nor the mortgage lender no matter how much
     you wish it to be true.

When the real estate agent or broker you hire advises you on the real estate market
and the changing home values please listen. Please ask questions. Please understand
that agents and brokers in Macomb County are giving you the advice for a reason.
We've seen the dangers of overpricing homes first hand and on a daily basis. We want
to work with you and for you.

Price your home to sell 3 times: To a buyers agent, to the buyer, and to the appraiser.

If you would like advice on the market value of your home please don't hesitate to
contact me either via email or phone. I would be happy to discuss with you your home
and needs in a non-pressured atmosphere.

Sincerely,

Kris Wales - RE/MAX Advantage 1, Inc. Search Michigan homes for sale
Chesterfield Township - Macomb County Michigan
586-840-1876 (direct line)

http://macombhomes.com

©2007 Kris Wales - Macomb County MI real estate

Contact Kris Wales - A partner for your real estate needs in Macomb County MI

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Posted by Kris Wales - Macomb County MI real estate blog & homes for sale search site on 10/07/2007 11:08 AM

Comments (85)

sell a home, macomb county real estate

This post has been included in Michigan Information Macomb County, MI Information
Post is included in group: Michigan Real Estate

85 Comments on I have to "sell" my asking price 3 times????

OCT

2007

When I was in another business one of the pressures on price was and is the internet. The enhanced ability to shop puts the pressure on price. very interesting blog Got me thinking early

Kris, I like your short and sweet explanation of selling the price 3 times. I've bookmarked this and may use when talking with potential sellers in our area. Good work!

Kris - great job explaining this to sellers. They just really don't have a clue about setting the correct price to begin with. Short and sweet and great pointers! This one is definitely a bookmark and a 5

I rated this a 5, because it is true and I like the 3 step process. Good job.

Good morning Kris,
Good points for the sellers, many are still in denial and do not understand the price has to be right from the START. Thanks for a good post.

I love your explanation! Thanks!!

Charlie: You are right on target with Internet shopping! Buyers are so savvy and educated and our sellers need to be aware of that. Thanks for stopping by and commenting.

Brian: Thank you so much for your kind comment. I've been telling sellers this for a while, I may have it be the first sheet of my presentation - visually it may sink in then.

Linda: Thank you for your nice comment and reinforcement that this is so important, especially in the market we're facing today. It's always good to see you here :-)

Missy: Coming from you this is high praise. Thank you so much. You're one of the "listing agent idols" that I have. Have a fun day Missy and thanks again - you are appreciated.

Cynthia: Good morning to you also! I think part of the problem is sellers have been so used to rapid appreciation that it's emotionally difficult for them to grasp this. It's understandable, but it has to be addressed. Thank YOU for your comment and stopping by to read this.

Christopher: I'm glad you popped in this morning, thank you for your comment :-)

Kris...so true. There are many layers of approval before we get to the closing.

Al: I don't know if you're seeing it in your market, but "appraisal review" is now the norm here in Michigan. I should have added that to the post..the fourth person you have to sell your price to. Thanks for stopping in!

Hi Kris - so true, I like your 3 step proccess. I think more agents are starting to price homes right in our area, and I think sellers are starting to realize this also. Good post!

Mike: For the most part I think you're correct. Most sellers "get it" lately. Last night though I was showing homes and was amazed at the number of homes in the same subdivision for sale that were $20,000 to $30,000 over the price of the homes we were viewing. Guess what? We didn't view the overpriced homes.

Great post Kris and thanks for commenting on mine on this very subject this morning. Sometimes sellers need educating. And sometimes they don't want to hear it

Simon: Thanks so much for stopping by and commenting. I agree, sellers do need educating about the process and the potential pitfalls to not pricing the home correctly. No, they don't want to hear it, but they are thankful afterwards for our honesty.

Thanks for the post, great comments to share with sellers.

Great post!

Very true...thanks for sharing it with us!

Take care & good luck!

OCT

2007

Great pointers.

Kevin and Monica: Thanks so much for stopping by to read and comment.

Armando: Thank you!

Nathan: Thanks, I hope you can use them from time to time.

Great Post Kris!

I cannot agree more! I am now refusing listings if they are not priced according to the market. if every Broker or Agent did this, more Sellers would have a much more realistic view of the market and act accordingly if they really want to sell!

It can be helpful to bring in a bank appraiser before the price is set. Let him/her be the bad guy with the bad news. Saves everybody time and confusion.

Rick: I'm also refusing to list homes that the sellers want to overprice. It hurts them in the long run. Thanks for stopping in Rick.

Karen: If there is an uncertainty in the market value because of lack of comparable sales then I agree that an appraisor should be consulted prior to listing. Usually though (in my area) there are more than enough comparable sales and homes currently on the market to give us a good idea of what the market value is to a buyer.

I had a client who told me last yerar, "I think you and Mike (the other agent), are more concerned about the appraisal than I am. i don't care if it appraises or not. In FL we just pay for it anyway."

NO, NO, NO!! In NC we don't do that. Never have and, probably, never will.

Great way to put it. Recently it's been coming down to the appraisers that have put a kink in things!

Kris, we have no lack of comparables, the sellers don't always believe they're valid. You know, it's that "My house is soooo much better." syndrome.

A bank appraisal knocks them upside the head.

Kris,

How many times have we heard the phrase " I don't want to give it away!"

Your 3 tips on selling the price right hit home. Informative post for today's sellers.

OCT

2007

Moderator: Thank you so much for featuring this in "Localism". I truly believe it is timely information for todays challenging market in Macomb County.

Virginia: In all my years in this industry I've only had one buyer client pay more than the appraised value and that was because it was a unique property and they had a unique situation. It's hard to believe it is the norm in some areas! Thanks for sharing that with me.

Craig: We can't blame the appraisers, they're simply doing their job in their challenging market. Letting our sellers know how the process works heads off that potential "deal killer". Thanks for stopping in and commenting Craig.

Karen: The sad thing is that some of these homes ARE better than the comparable sales, but the appraiser can only add so much more to the value that it doesn't make much of a difference. It's frustrating isn't it?

Dave: I hear that daily. My response has always been "You're not giving it away, you're selling it, at todays fair market value". It' hard for sellers and sometimes emotional, but it's necessary that we give them the truth.

Kris: Thank you for understanding that last part about the appraisals. Lenders are being so careful these days, and nothing is worse than getting all the way to the end and having everything blow up as a result of the appraisal being too low. This is perhaps the MOST compelling reason NOT to overprice.

Bravo Kris,

I have to incorporate this information in my next listing presentation...Well done and thank you.

Great blog! Maybe everyone that has a home should read this!

The truth, the whole truth and nothing but the truth. This is valuable information worth of being included in a prelisting or listing appointment.

Kris, this is a very well reasoned post. You're right - if a listing isn't priced competitively, it won't even make it past the buyer agent.

Kris, Thanks for giving us a tool we can use in todays market. I think your 3 step recipe will help with the seller that is looking at what the neighbor got 6 months ago as the only reasonable comp. Another problem we have is the seller that has already pulled the profit out of the home by refinancing to the max. They are the tougher nut.

Thanks again

Very Very true, it is still hard to convince some sellers that they can't always reduce the price later if need be. these days if you over price by 5% you may have to do a 10% to 12% price cut just to get some attention back to your house.

So very true. For all of Michigan right now. The days of it all just working out are long over.

Great tips! In this market, if your not on top of all three of those, you can easily find yourself in trouble. I am always amazed when agents don't meet the appraiser when they work their number mojo.

Kris, superb, level 5 post. AM working on something for our Sellers and this is another take, and a great one, on pricing. There is no "lets see if we can get lucky" opportunities in our market. There is success, however, but it has to be priced right... and it has to be obvious... as you say, to other agents first. And that is hard to gain consensus on. Some agents, just like buyers, can't recognize the deal they are looking for when it is staring them in the face.

cheers

Hi Kris - I LOVE this post!!! You are so right on the mark with this information, and I would imagine this 3 steps of pricing would hold true all over the country. I know I'm going to be using this from now on in my listing presentations. I do something similar but this hits the nail on the better than mine.

Thank YOU for this post!
Ann

congrats on the pruddy star - and a well deserved one I might add - great points well done

Great blog- You did an excellent job. This is such an important factor, and many times the sellers just don't get that it is a BUYERS market now.

Advice for all home sellers to live by. Now, if only all home sellers would read it.

Excellent post. i know that home sellers won't all read it... and if they do, they won't think we are talking about them. I guess that means it's our job to educate them.

Thank you for a great post.

Janet: I agree, nothing is more shattering to sellers than planning on a transaction going through and having an appraisal fall through.

Wayne: Thank YOU and please let me know if it helps in your presentation.

Scot: I do hope this reaches those consumers that are tempted to overprice their homes and "try" it high for a time period.

Chris: Absolutely! Thanks so much for stopping by, reading and commenting.

Brian: You got it right. A seller can't get to point B without getting past point A.

Corie: Those are the customary arguments aren't they? If a seller has already pulled the equity out then he's already received his "profit". I can't get him any more in this market.

James: You're absolutely correct! In our market prices are rapidly falling in some areas. Pricing it within todays market value will save them 10-15% later, sometimes as "later" as 30 days hence.

Maureen: I imagine as a "heavy" listing agent in Oakland County you're hearing much of the same arguments as I'm hearing and confronting the same issues. Thanks so much for stopping by and commenting.

Robert: Part of the evaluation that we need to do is anticipate what the appraiser is going to see and decide. That in itself should be top priority. Thanks for reading and commenting Robert.

Gary: Thanks so much for your kind words. I've used this approach with sellers for a while. The days of asking for the moon are over and I cannot stress enough the importance of pricing well if you want to sell. In our area buyers agents are pretty savvy and know right away if a home is overpriced. Cheers back actcha :-)

Ann: Thanks so much! I hope it works well with your sellers and helps clarify the issue for them. Let me know how it works for you please.

Thesa: You're a sweetie. Thank you for the nice comment.

Alecia: Thank you so much. It's been a buyers market here for a while now, so I think sellers are "getting it" for the most part. There are many though who still want to test the market at the high end - it doesn't work out well at all.

Lenn: I posted this so that all who wanted could use the same 3 guidelines and show it to their sellers. I hope it works for other agents AND their sellers. Thanks for stopping in and reading Lenn and for your kind comment.

Lane: We are educators aren't we? That is the essence of our daily duties. Thank you so much for stopping in Lane.

Thanks for outlining the process in three easy steps. So true..

Jayson: You are very welcome. I hope it comes in handy for you with your selle clients. Thanks for reading and commenting Jayson.

Hi, I just started with ActiveRain and I absolutely love that post. It is so true, it would make so much easier if sellers just realize that.

Kris, great post. I think the price has to be "sold" to the listing agent as well. If the price is too high and there is no chance of an offer than you might not want the listing.

Kris, I've told homeowners this for years. Now, more than ever, selling it to the appraiser is not a given. I'm fighting one right now.

Tell you what...that is something I wish EVERY home seller would read! Too many of them don't understand. When I go out as a buyers agent and the buyer finds the right house, but it's priced too high, then we have to worry about getting them realistic and many times the sellers agent doesn't help. With the newer sellers agents I usually as them what they think the property will appraise for..followed by a long silence. That gets them thinking!

Kris, congratulations !! I just got home and notice you were featured. Plus, I use the 3 people you have to sell your home to last night with a potential seller.

Kris,

That's a great post and one that I'm sure you'll incorporate into your marketing materials. Kudos to you.

Hi Kris,

This is a wonderful post, just the kind of thing that consumers NEED to know about today's marketplace. Not sure if you posted this on localism but you should definitely post this on your blogspot blog as well. Thanks for sharing!

Diane Cohn, Realtor
Chase International

www.renorealtyblog.com

Hi Kris,

Great job, I agree with you on this! This is perfect for consumers, congrats on your well deserved feature!

Kris great post. After reading this, I started thinking about which price is the most crucial and I think it's the price to the appraiser. Even if a buyer bites on an ovepriced listing, the deal will mostly likey fall apart when the appraisal comes back low. I can count on 1 hand the number of times in 10yrs I've seen the buyer make up the difference. Great info to get out to sellers.

This is a timely post. I have 2 buyers -- strong credit - pre-approved -- and wanting to buy -- each has selected a property -- problem -- the 2 properties are very overpriced! I just don't get it! I am not sure what the sellers are thinking! My buyers are very confused.

Nice way to put it in a simple perspective that most sellers could understand. (If they wanted too.)

OCT

2007

You are soooo right. A price to high leaves a home sitting and sitting.

I will have to remember the selling the price 3 times. That is a great way of explaining it to your clients.

Sherry: First, welcome to AR! I hope you enjoy it as much as I have. Thank you for stopping in and reading & commening, I'm glad you found this article helpful to you.

David: You're correct. I've been turning away listings that the owners want to overprice them. I don't want to hurt their home sale, and that is a sure fire way to do that.

Sharon: I'm hearing alot of that lately. Good luck to you and I hope that you're representing the buyers on the "short" appraisal deal :-)

Chris Tesch: It is frustrating. What I find is helpful is to not show the homes that are overpriced. I tell my buyer clients upfront the issue, and almost all of them won't want to see the homes then. That eliminates the appraisal issue problem right from the start.

Missy: Thank you!! Please tell me that using this helped in your presentation tonight for price - did it make it easier for the sellers to understand?

Diane: I already do incorporate this, I find it to be very helpful with sellers to see things this way. Thank you for stopping in and commenting Diane.

Suzanne: Thank you so much. Thank you also for taking the time to read and comment!

Rob: If we get that far, the appraisers opinion is the deal maker or breaker. Most of the time though with an overpriced home we don't get that far. Thanks for stopping in and commenting Rob.

Joan: The only thing you can do is to try to get a purchase agreement through for your buyers that is the market value that you believe (and they believe) is correct. The ball is then in the sellers court. Good luck to you! I know how frustrating it can be at times.

Darrel: It all comes down to motivation doesn't it? Thanks for reading and commenting Darrel.

Bob & Carolyn: ..and sitting..and sitting..and sitting :-) You're absolutely correct. Thanks so much for stopping in, reading and commenting.

Randy: Let me know if it works to help explain things in your market please. Thank you for commenting Randy.

great post --- this isa great tool

Excellent post. Something my managing broker has been throwing out at the office meetings since mid-2006. You can't just price the house at what John Doe down the block sold for last year (or whenever). Bank Appraisers will get you every time!

So True - I heard this one back in the last down market in 1991 - Still holds true in todays market!

Believe it or not....I have a seller who lives in "la-la" land and thinks that the right buyer will come along and be willing to pay his list price regardless of what the market will bear or what an appraiser will say. He is about $100K over-priced. I'm still trying to figure out what buyer is going to pay $100K too much for a run of the mill average house.

Needless to say, I am releasing him from the listing tomorrow...not worth my time or energy.

Maybe I need to copy and paste this post for me presentation tool provided I got the apporval form you. Great Post. Thanks.

Kris, Thanks for the great post. I'll be using your "3 step Price" formula in my listing presentations. Thank you for sharing.

Really excellent pot - So well put - trying to get a property on the short list to be shown is a real tough one these days!

Very well written post. I enjoyed reading it. The points you make are totally on target. Wish every seller would read them.

Kris - Congratulations on your Featured Post!!! That's awesome. Great job.

A few years ago sellers could push the market. But today if they overprice they are pretty much dead in the water.

OCT

2007

Rebecca: Thanks so much for reading and commenting - hope it helps you!

Antoinette: It sounds like your broker has a good handle on the market and is sharing the wisdom with all of you. Thanks so much for stopping by!

Debbie: I didn't get into the business until 1997 so I missed that "other" slow market :-) Good items and wisdom always come back into style though don't they?

Chelle: Sorry to hear that is happening to you. $100,000 too high? Wow. The best thing you can do for that client is to release him/her, glad to hear you've made that decision. Good luck to you!

Susan: Absolutely! I wrote this article to "pay it forward". Please do use it, and let me know if it has good results for you.

Bruce: You are very welcome, and thank YOU for taking the time to read and comment.

David: Buyers are very smart - they know when a home is overpriced. You're correct, getting a buyer into that overpriced home is rarely going to happen. Thanks for stopping in David.

Lola: Thanks so much for your kind words. I think more and more in our area sellers are getting the picture, but sometimes simplicity helps.

Mike: Good to see you! Thanks so much Mike.

Ki: You're correct. Just a few years ago asking on the "high" end didn't hurt a seller. Now it pushes them to the bottom of the list of homes that will be viewed, if ever.

Great post, all points are valid. The problem we have in our market right now is that 2/3 of the listings are overpriced. See my post about the Salt Lake market. Listing agents need to read your post.

OCT

2007

Benjamin: It sounds like your area of the country is experiencing at an even higher rate the overpriced homes on the market. Perhaps the listing agents in your area would benefit from reading your post about the dangers in overpricing.

OCT

2007

Good way to look at it... So true!

Troy: It's always been true, but in todays market it is even more imperative. Thanks so much for stopping in and commenting.

OCT

2007

Kris,

Great job at explaining the process. I couldn't agree with you more!

Continued success to you!

Lucky :)

Kris...What a great post. I love how you explained it to the sellers. I'd like to use this in my next class as an example for my students if you don't mind.

Lucky: Thank you! I'm glad you stopped by to read and comment.

Monika: Please do - I'd be honored to have you use this in your next class. Thanks :-)

MAY

2008

I actually had the entire text from the front page of one of my websites copied by another agent, who denied it. I then pointed out that MY NAME was on his website, too.

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