Castle-syndrome or is it SIN-drome?
We've all been there: It's 2015, The house was built in 1975, the second owners still live there and are now wanting to sell. They did a partial remodel in 1993 (the screened in porch, not to the kitchen) and they think it's the best on the block because of the updates and the unique breeze they get between 4:30pm and 4:45pm every day that none of the neighbors get!
...or something to that affect right? So, how do we get the listing without insulting the homeowner or lying to them? I go to the Market Numbers. I never tell the owner anything. "The Market" tells them.
I "Let The Market (numbers) Do The Talking".
I like to find out the following first, here's a partial list:
1. Why are you selling now? (Their Why).
2. Are you on a time-frame or deadline to do so? (new job, new school for kids, etc.-their motivation).
3. How much do you owe on the house? (I like them to focus on their 94% not the 6%).
4. If you were to be given $50,000 and another 5 years to live here, what would you do to the house?" This gets them thinking like a buyer will, what needs work here?
5. What needs to happen before we list your home for sale? (I like this question to follow #4 as other "clues" will get mentioned here: "we should shampoo the carpets", "maybe we should touch up paint" or "well we need to pack", or "we need to move out first" , etc.
Then I work like an appraiser would on the comps:
- 90 days sold , no further back than 6 months sold, more recent the better. (historical data)
- no more than 1 mile radius from the house, closer the better. (less variables in "location")
- no greater variance than + or - 20% of sqft. & floor plan. (I'm conservative here, I like +/- 1 bed or bath and less than +/- 100 sqft. or less if I have enough comps.
- similar floor-plans, condition/upgrades, lot size and views factor in.
- Same criteria with Pendings, only to see where the neighborhood is trending. Pendings on average in escrow higher than recent sold = appreciating market and conversely if they are averaging lower price point, the neighborhood is depreciating which helps me see the price if a range comes out of the comps vs. an obvious set price.
I then show the sellers what "the market says their home is worth". I show them the comps I used and then I show them what their current competition is asking (Actives). I fan out 3-6 Sold and 3-6 Active MLS reports and ask them to pick the one from each group that is most like their home in their opinion. Their choice shows me where their heads are at price-wise.
Ultimately, the Market numbers do the talking and sellers will realize the reality of their home or they won't. If they do, I apply for the listing. If they don't, I let them know "I don't think my services are a match for you, but I have a great referral to an agent that can help you!" and I refer them to one of the agents in my office that openly likes challenges (he's newer and hungry). I figure 25% on a possibility is better than 100% of "lack of reality" at this point in my career. I like to put my time, energy & money into realistic sellers. I don't collect over priced listings just to have listings; I sell listings, typically in the first 30 days.
For a great article on Defending Your Commission, see Tony and Suzanne Marriott's post.
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