Many sellers are in this exact situation. They wonder why it that my home didn’t sell is yet the others in my area did? This can be because of a great variety of issues. I hope to try to address most if not all of the issues that cause a property to sit on the market longer than it should. Today’s topic is price. I know as a seller your thinking always with the price. You agents and brokers always blame it on my price. Well this time I'm not only addressing maybe the price you chose but also the price that your agent sold you on.
Unfortunately it is too much of a common practice for agents and or brokers to take listings at prices that they know are too high and are not supported by the local market. They do this cause they want, need, and the business and can't fathom the idea of walking away from a listing appointment without a signed listing agreement.
I've been an agent with both independent and big name companies and its funny to many how at the weekly meetings price reductions are such a big deal and celebrated. I mean some agents even put in predetermined price reductions in their listing agreements. I am not saying that this is bad business; it’s just not the way I do or want to do business.
First off let’s talk about how did you as a seller come up with your price? You are probably figuring out how much money you want to net and that is what you’re using to set your list price. That isn't the way to do it. What you need to net has no effect on what the market thinks your home is worth. A lot of sellers don't understand this and get frustrated that agents don't agree with their price. Now maybe your setting your price based on the data that your agent provided you regarding comparable homes in the area. This would be the best and most accurate way to set your price if agents pulled the best com parables for your property every time. Unfortunately determining the value on a property is subjective. That’s write that is why so many agents will give you so many different suggested list prices. What you have to understand that the basic guidelines in determining what a good comparable property to yours is are as follow. First distance half a mile is best but if you have to you can go out a full mile. Now square footage you want to stay within 10/20% more or less in relationship to your properties square footage. You should have at least three properties that have closed, three that are currently active, and two or three that are pending to get a good snapshot of the local market. You also must take in to account room count and features and amenities.
It takes a lot of different variable factors all mixed together analyzed correctly in order to come up with a good list price.
So before you sign on the dotted line ask your agent and or broker your interviewing to lay out exactly how he came to the list price that he or she is suggesting. Remember if it seems too good to be true it probably is. Don't hire a yes man or woman hire an agent or broker who is willing to be realistic with you and speak honestly and openly. If you feel like their trying too hard to go for the close makes sure you are well informed before making your decision.
One thing that most sellers don't think of when deciding what to list their property for is holding cost. What is it costing you to own this property every month? You've already decided that you no longer want to own this property so why should you put more money in to it and or pay more interest on the mortgage you’re trying to get rid of? Sit down do your numbers and know what does it cost me to own this home on monthly bases.
The other thing I want to point out is time on market. How quickly do you want your home sold? You must have an idea of how long you want to be trying to sell your home? You need to know how long in order to help determine the list price for your home. Once you have the length of time determined you have to look and see how long is it taking other homes in my area to sell and at what price ranges? Again this is something you'll probably need to get help with from you’re a get and or broker.
This is just a sneak peek of what it takes to price your home correctly and why you should. Make sure to not just extend that listing agreement decide are you getting all the factors presented to you about the local market and what homes like yours are doing? We live in an age that data is bountiful so there is no reason you shouldn't be well informed.
Guillermo Serafin
DRE: 01471159
Department of Insurance CA#0H04158
Broker/Owner
Realtor, Mortgage Planner, (Residential/Commercial)
Foreclosure and Short Sale specialist.
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