How to net the highest price & best terms in any given market.

By
Real Estate Agent with eXp Realty of California Inc. BRE #01743923

As I search the Multiple Listing Service (MLS) in my home of Santa Cruz County. I see the majority of homes are overpriced.  It is sad to me that after decades of debunking the concept most sellers still believe that the surest way to get the highest price is to start high "and see what happens." As real estate professionals know, that is a sure fire way to "chase the market down" and net far less than you could have had you priced at fair market value from day one. A small percentage of the homes listed in my local MLS are actually "in the market." Most in Santa Cruz County are "outside the market" as a result of being priced above fair market value. Many list prices are based on what a home seller paid for the property or what a home seller has paid to improve the property or what other homes in the area are currently listed for. The reality of the situation is that what a homeowner paid for their property does not reflect the value of said property when the average value in Santa Cruz County has declined in value as much as 35% since the height of the market in 2005. Some pockets of the county have decreased by lower percentages but there is no neighborhood which has been completely insulated from the decreases in value resulting from overwhelming economic forces. Pricing a home based on the dollars spent on improvements does not pencil out either since "improvements" are most often perceived differently by a buyer and a seller. What is a valuable improvement in the mind of a seller may hold zero value to a buyer due to color or style etc. The third common mistake sellers make when formulating their opinion regarding the value of their home is by looking at the list price of other homes that are on the market in the area and unsold. A true comp is only a sold property and in a declining market it should be a sold comp from the past few months. So the homes that sit outside of the market due to overpricing only accomplish to help sell the homes which are priced right. When an overpriced home goes thru a series of price reductions, therefore chasing the declining market down, it eventually hits fair market value. By that time the listing is an "old listing" and buyers wonder what is wrong with it and they low ball their offers since it has been on the market a long time. When buyers or a buyer's agent see high "days on market" they figure there is more room to negotiate on the "old listing" as opposed to a new and exciting listing which all buyers turn their attention to when priced right. The good news is that Santa Cruz County is one of the most majestic places on Earth with the mountains at our back door and the ocean at our front door. You can be mountain biking thru a redwood forest in the morning and kayaking along the shore in the afternoon! The one-of-a-kind setting, the amazing weather and the laid back attitude will always make Santa Cruz County property desirable. I have lived here my entire life and cannot imagine a more wonderful place to live. On the topic of good news... when a home is priced right from the start along with the other key components to a comprehensive marketing plan in place, a home will sell and will often sell with multiple offers. This process nets the seller the highest price and best terms available in any given market.  So when you sell your home, make the wise decision and price it right based on a current market analysis of sold comps and make sure your agent has a comprehensive marketing plan that will expose your home which is "priced to sell" to the eyes of all potential buyers worldwide.

 

Posted by

 

Melody Russell

831-332-3975

Keller Williams Realty

1414 Soquel Ave. Ste.100, Santa Cruz, CA 95062

www.MelodyRussell.com 

831-471-9129

DRE#01743923

Together we accomplish more.

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pricing a home
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Rainer
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Art Hademan
Century 21 Real Estate Center - Mount Vernon, WA

Melody,

Someone posted a blog a few days ago that addressed some of the points you've discussed here.

I don't think we can ever hear enough about the need for sellers to be realistic about the sale of their property.

My take on this issue is that if a seller is not willing to accept what I have to say about comps, and always include sales in close proximity to the target property, then I'm going to walk from the listing. I tell them right to their face that they're not being realistic and I can't sell their house. We have to represent clients who we can do a job for and people who refuse to accept the facts are not good clients.

I'm really getting nasty in my old age aren't I!

Jan 31, 2011 06:55 PM #1
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MichelleCherie Carr Crowe Just Call...408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Realistic pricing is difficult for sellers to swallow-I lost out on one that has been on the market 6 mo. then FSBO another 1 year but they are still set on their price.

Jan 31, 2011 06:59 PM #2
Rainer
216,048
Melody Russell
eXp Realty of California Inc. - Scotts Valley, CA
Ranked as 1 of the top selling agents in SC County

Art - Thanks for your comments. I agree and I would rather not taking a listing than to put a seller at risk by leading them to believe that I can sell their home for an unrealistic price. The first few weeks are when a new listing gets the most attention and if the home is not in the right price range for buyers and buyers agents to see it in their search then it is not really even on the market.

Feb 01, 2011 06:21 AM #3
Rainer
216,048
Melody Russell
eXp Realty of California Inc. - Scotts Valley, CA
Ranked as 1 of the top selling agents in SC County

Michelle - You did not lose anything by not taking an overpriced listing with an unrealistic seller. You saved yourself the advertising costs, the months of work and loads of frustration.  I commend you for taking the high road and not taking the listing just to have a listing but being honest and telling the home seller what they need to hear as opposed to hear.  By not draining your advertising funds and your energy on unrealistic listings you leave your time and marketing funds available to support the home sellers who are realistic and who are willing to work with you, not against you, for a successful sale. 

Feb 01, 2011 06:31 AM #4
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Rainer
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Melody Russell

Ranked as 1 of the top selling agents in SC County
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