Behind the velvet rope, setting the price for a home is not some voodoo. Homeowners will always have some idea of what price their home should be sold for. It is important to ask them how they arrived at such a price. The listing price of a home is crucial when it goes on the market. If the compatibles are priced below your list then you will not get any offers and you may not even get any visitors. If you are not having people view your home then something is wrong with the price, or marketing, or both, usually both. Most agents know how to search for comparable values to help determine the price and then get derailed by listening to the Seller who wants more. This is a conflict for agents who need listings and are willing to forgo reason to have them. Listings that sit on the market and don't get buyers will only diminish further in the market. We have all had these kind of listings.
Banks lend on a value determined by their appraiser. An appraiser has strict guidelines on value determination. It is in the agents interest to know as much as they can about this process so they can be a true authority regarding price when your Seller asks you. Price, for the most part, is not arbitrary. Price is not determined by what you paid for the home, or the repairs and remodeling you have done while you live there. Price is determined by what is going on in your area (one third of a mile within the last 3 months) by the appraiser. This is what lenders look at to determine if the loan you are requesting makes sense. When the value is too high, the loan goes away.
A property that comes on the market at too high a price looses value as it sits there. Buyers look at the Days on Market statistic and feel that if a house isn't gobbled up right away then there must be something wrong. As an agent you can not say that what is wrong is the Seller who will not budge on the inflated price. The property will continue to loose value and ultimately expire or get canceled. The Seller will blame the agent and the agent will blame the Seller. The problem here is that neither are taking responsibility. The professional agent knows the right price and is able to communicate that to the Seller. If the Seller wants more and lets you know that another agent agrees with them on price then your job, as the authority, is to stick to what you know and continue to explain the right strategy. If the listing goes to the other agent, then just wait. It is likely to circle back to you later. Knowing the process of appraising is a real asset to your skills as a professional. Being able to calmly and professionally communicate that to a Seller without emotion is a practiced skill. Stay strong my friends and professional. Set the price right, market the property using best practices in Internet marketing and get ready to write the offers. Enjoy the weekend.
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