Well as a few of you know, I recently had a contact from a potential client to list their home. This came from my web site that I just started in December, and I believe that he found me from my little activity here on the Rain. After the initial shock and excitement wore of, I contacted the home owners, got some information, and got about to doing my CMA. I had set an appointment for 1:00pm, so they could put the little ones down for a nap, and we could talk uninterrupted
The day of my appointment, I drove the short distance from my office to the residential community that the home was in. I was in the area 1/2 hour before the appointment in order to check out a new home subdivision being built. I wanted to see what the competition was. They had a larger home with an extra bedroom for the same price that my hopeful clients had paid for their home a year ago. That is stiff competition!
After looking at the model homes, I left for the clients home, and still being a little early, drove around the neighborhood to check it out. I then arrived at my clients home, and knocked on the door at 1:00 sharp. The husband opened the door and we introduced ourselves. Upon entering the home, I offered to remove my shoes before entering, but was told not to bother. Then I met the wife and children. The husband then proceeded to show me their beautiful home. It was over 3000 sq ft, had 4 bedrooms & 3 baths. All 4bedrooms were upstairs, along with a small study alcove. The laundry room was upstairs too, nice feature! The master room was large and had a retreat with a fireplace(for those cold southern Ca. days) and a large walk in closet and nice bathroom. They had ceiling fans in all the rooms.
Downstairs there was 2 living areas, a bonus room, and a nice open kitchen with lots of cabinets and a small pantry. Granite on the counter tops and an island with the sink and dishwasher that was facing the living room, so when the wife was in the kitchen she could see the kids playing. Outside was landscaped, over all the house was like a model home.
We sat down at the kitchen table and I showed them all the comps I had pulled for their area, and explained as much as I could to them. I had a lot of info, maybe more than what a standard report would have in it. My concern for them was that most of the homes in the area had been on the market for a long time, and at lower prices than what they were expecting. I don't think they were expecting the values to be so low.
I told them that it would be in their best interest if they could wait another year, mostly to avoid any potential capitol gains taxes, and to avoid the California capitol gains withholding tax of 3 1/3%. I strongly advised them to seek the counsel of a CPA in order to know what their liabilities might be. I told them they should do this before entering into any contract to sell their home, being it with me or any other agent.
They really wanted to move for the new job, so waiting wasn't what they wanted. They had seen an agent earlier in the week, and was given a listing price, which they didn't like. They wanted more if possible. They asked about my experience and I told them the truth. They were my second listing appointment, the other was for a friend who was thinking of selling their home, but due to a prepayment penalty on their loan, I had advised him to wait until that period was over. I told them I wasn't about to screw over a friend, and that was how I wanted to conduct my business. I told them my company would place ads in the local papers, and I would have it on my web site and Active-rain too. With open houses and showings to fit their schedules as well.
Over all I was there an hour and a half, Is this too long? They thanked me for my time and I left. They informed me that they still had one agent to talk too, and would get back to me. The last agent was a family friend, but was 30 miles away and they weren't sure if he could give them service.
When I got home later that evening, I sent them a thank you email. A few days later they let me know that they were going with the friend realtor, not much of a shock there. In a way I was glad, I see that this realtor has listed the home for more than other homes are selling for in the area. I expect it to sit a while, which is not what they wanted, because the job offer wouldn't last long. It is listed for $60,000 more than the new homes being built down the street, that is a tough sell. But I wish them well, and I hope for them that it does sell quickly, at any price.
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You just saved yourself a lot of money marketing an overpriced home and a lot of time that you can spend on a motivated seller. NEXT! That one wasn't worth it. You have to know when to say no.
Don't be afraid to explain how appraisals work. If you're not really sure, ask a lender or appraiser.
Don't be afraid to explain what "Buying a listing" is. You are auditioning your marketing plan. THey shouldn't be interviewing for "who offers the best listing price".
High list price vs. appraisal and the vicious circle continues.
Thanks for all the tips Chris.