You Love Them... They Love You... But...
HOME SELLERS:
Those loving friends of yours are shaking their heads and saying that your listing price is too low... the commission you're offering is too high... and you chose the wrong agent. You believe those friends mean only the best for you, and that's why you rely upon them even though they have no professional expertise in real estate. Of course, they'll quickly tell you they have all the right answers (from reading the Washington Post and watching CNN):
- Raise the price of your home - Quick, before someone makes an offer.
- Drop the commission - Why pay more, when you could pay less?
- Fire your agent - Hire the discount broker and/or someone who will advertise in the newspapers and give you a magnet for your refrigerator.
To all of you, I have a single word of advice: NO!
FRIENDS OF HOME SELLERS (AND BUYERS):
If you love your friends and truly care about them, please keep your advice to yourself. Here's why:
Pricing is an art. It requires a lot of factual knowledge AND experience that you simply don't have.
You may not know how many homes sold last month, and whether that is more or fewer than the previous month or the same month last year.
You may not know how long homes are taking to sell, or what it will take to sell more quickly than the average.
You may not know how many homes are competing for the same buyers, or the details of those homes' size, features, and location. In fact, you may not know that information about your friend's home.
You may not know the average or median sold price last month, and whether that is higher or lower than the previous month or the same month last year.
You may not know today's financing requirements, including the trends with appraisals and underwriting.
You may not have a professionally-developed Buyer Profile to enlighten your opinion on whether or not the agent's marketing will be effective.
You may not know what commission rate and/or bonuses are the current trend or what may catch the eye of buyer-agents with live warm-bodied clients.
You may not be proficient in technology and realize that 80% of today's home buyers begin their search on the Internet (not in the classifieds or driving around looking for "sale" signs).
You may not know what other "comparable" homes sold for recently, or what the terms of the sale may have been. (In the Crofton market, the average last month was 10% below list price - not counting any closing help or other concessions.)
You may not know the prices of competing properties for sale, including short sales and foreclosed properties priced significantly lower than other active listings and recent sold comps.
You may not know the professional qualifications of the agent advising your friend, possibly years of experience and hundreds of successful real estate transactions.
You may be relying upon your own unique experience in pricing a home or choosing an agent - 3 years ago. If you haven't sold a home (or 2 or 3 or 10) in the past 30 days, you are not qualified to judge what may be effective NOW.
All of these factors go into pricing a property for sale, and a seller cannot afford to be wrong. Overpricing will only backfire! The same considerations apply for home buyers, from their perspective, when they choose an offering price.
Chances are very good that your friend's listing or selling agent is better qualified to advise him or her than the best and most well-intentioned friend. Have faith in your friend's judgment... he/she is capable of making an informed decision based on the facts of today's local market.
Give your friend a hug and your moral support - but please don't give real estate advice (even if he/she asks your opinion). No doubt your friend sat down with an agent, or perhaps several agents, and learned a lot about the local market (as opposed to the regional or national market reported in the media). Together with the listing agent, your friend probably considered the pros and cons of different pricing strategies, marketing plans and commission options (sellers) or contract strategies, offering price and financing options (buyers). After some stress and maybe even some agony, your friend made a decision based on facts and the professional recommendation of his/her agent.
Please respect his/her decisions and encourage patience. In this market, a LOT of patience is required on the part of home sellers and buyers, and that is easier with the moral support and encouragement of friends. Making them second-guess their decisions is not helping.
Images: Iclipart
Copyright 2008. All rights reserved. Margaret Woda
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For more information, check out Focus On Crofton and Your Online Relocation Package for Anne Arundel County by Margaret Woda.
Serving Crofton and the neighboring communities of Annapolis, Bowie, Crownsville, Davidsonville, Fort Meade, Gambrills, Millersville, and Odenton.
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