The frustrating part of this experience was the reminder that - statistically - most agents won't or can't, and therefore certainly don't make an irresistible presentation on pricing. 90% (9 out of 10) listings are listed too high. In the third quarter of this year, the median Days on Market for homes that were priced right and did not need a price reduction in order to sell was 25 days (less than a month!) in metro Atlanta. However, for those listings that had to have a price reduction before they could sell, the median Days on Market for those homes was 252 (10 times longer!).
The truth is that being overly optimistic about a listing in terms of price or condition or appeal is the equivalent of putting lipstick on a pig. We live in a smart world. We are living in the reality of a buyer's market. A buyer's market means that buyer's don't fall for marketing...or lipstick. They fall for value, and they fall when price is less than value. If your listing's price exceeds the value of the listing, game over. If your value exceeds your price, game on.
In the world of "Rock, Paper, Scissors" the market always wins. A seller's personal circumstances, no matter how dire or compelling they may be, do not determine the value of their property. Only the market determines value. Sellers often say, "I need to get this much...I owe the IRS this much...my divorce is costing me this much...I have to get this much in order to break even...my house is newer...bigger...better...lighter...brighter...smarter...more efficient...it has a newer HVAC...a bigger water heater...a better view...a bigger lot...better looking neighbors...lower utility bills...a newer roof...etc., etc., etc." All of which are nothing more than lipstick...on a pig.
One of the toughest elements of this market is the fact that houses lose their uniqueness. They're not special, no matter how special they are. The real disconnect is coming from this: Most sellers are trying to sell emotionally and buyers are buying logically. And agents who list properties and only speak "emotion" are really exacerbating the level of disconnect because buyers can't understand the logic behind their sales pitch. The best thing that we as agents can do for sellers is to speak "logic" when we take a listing a pitch it to buyers in the market. An emotionally charged marketing campaign in the absence of a logically based price results in reduced prices and expired listings, and sellers continue to be "held hostage" (thanks Michael!) by a home they no longer want. Logic means that something has to make good sense, particularly when compared to other things. Therefore, the properties that sell in less than 1 month on the market are the properties that show better than the other active listings on the market and are priced better than anything else that a buyer sees.
A listing is like an illness. With the right prescription (price) it goes away. With the wrong prescription (price) it gets worse.
No matter what, we have to be more concerned about taking an overpriced listing than we are about letting a good listing get away. Falling prey to the emotional circumstances and needs of a seller does no one any good. It hurts our bottom line; it hurts our reputation; and it does our sellers a disservice by giving them false hope and wasting time and money that many of them don't have.
Our ability to price listings accurately enough to attract offers has never had more importance. The time and money that this can save our sellers can literally save them. It can save their marriages, their families and it can save them financially. For the agents who understand this and become obsessive about it, there's never been a more rewarding time to be a Realtor.
I realize that the truth is tough and can hurt a seller right now. However, the lack of truth hurts more and does more damage than most people can see on the front end of selling a home. Our challenge and our opportunity is to raise the level of our game so that our clients can trust our data, trust our recommendations and predict the future as clearly as we can. Together we can meet this challenge!
Thanks for fighting the good fight! Together, we are making a huge difference in the lives of the people that we serve. I'm so proud to be in business with you.
Your #1 Fan...
SHAUN
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