Make sure the seller can afford to sell.

By
Real Estate Broker/Owner with HomeRome Realty 410-530-2400 311291

 

When it comes to pricing a house we need to look at comps.  How many are on the market, how many are under contract and how many have sold in the last 6 months.  

That's in the ideal world where there is a lot of activity.

When it comes to listing a home and determining the right listing price...there are few more things that come into play.

What is the reason for the move?

Are they right sizing? 

When do they want to settle?

Are they financially able to afford their home?

How much do they need for the next move?

Never price a home without knowing what is owed and what owners "need" to move forward. Find out the bottom line... in their pocket number.

Can they afford to sell and move on?

Some cannot.

Whether you are the first, second or third agent, it is a must to find out their expected dollar amount. If no one has explained the cost of selling or they don't understand the fees,  even with a  full price offer, they may not be able to afford to sell.

What the seller needs, has no bearing on the price.

It is a place to start the discussion. 

Make sure the seller can afford to sell.

 

Margaret Rome

 

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Rainmaker
3,173,507
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Margaret. Always did a net sheet based on the listing price and then explained a range based on the sales price to list price ratio for the area. Some could not afford to make the move! Excellent advice. Enjoy your day!

Mar 18, 2019 04:50 AM #3
Rainmaker
2,982,459
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Great advice, Margaret. We had so many issues when the market went sideways with homes being sold and sellers being short, that the State of NC included the requirement for mortgage(s) information in our listing contract. That helps start the conversation as to what the seller will net.

Mar 18, 2019 05:03 AM #4
Rainmaker
1,281,263
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

"What the seller needs has no bearing on the price". No truer words can be spoken and so many think it does. 

I once inherited a listing and when I interviewed the sellers I discovered if they did sell, they would probably be left homeless.  Their credit was horrible and they had hardly any equity in the home.  I don't think they would have even been able to rent a place.  They talked to a lender, at my urging, and discovered I was right.  They took the home off the market and stayed put. 

Mar 18, 2019 07:47 AM #5
Rainer
6,320
Willliam Ramdass

Carol Williams. I respect what you did. I will never ever use my licence "un-house" anybody. Some agents will think nothing of doing that in the name of a commission. What goes around comes around.

Mar 19, 2019 07:26 PM #6
Ambassador
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Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Carol Williams That's exactly what I was talking about. They can't afford to sell and did not even realize it.  Their needs are no bearing on the price!

Mar 20, 2019 01:50 PM #7
Rainmaker
250,989
Susan McCall, Independent Listing and Buyer Agent
Compass Realty Solutions - Portland, OR
Bringing buyers and sellers together!

That's the first thing I learned when I first got in real estate.  One of the potential sellers that I met with discovered they would need to bring in about $10,000 to sell their home.  They had too many children and not enough bedrooms.

Mar 22, 2019 05:45 PM #8
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Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Susan McCall, Listing and Buyer Agent Great thing to learn early in your career. 

Mar 22, 2019 06:10 PM #9
Rainmaker
1,513,585
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

This is interesting - I don't think I've seen anyone address this issue before.

Mar 22, 2019 10:16 PM #10
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Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Marte Cliff Spoke to an agent some time ago who told me she never asked for the seller's bottom line. She would always try to get the most she could. SCARY..huh!

Mar 22, 2019 10:21 PM #11
Rainmaker
3,178,223
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Margaret, it amazes me how many buyers and sellers are surprised of all the additional cost... in my market I give them a ballpark figure and tell them if they would like we could do a Net sheet before we  do anything and they are so grateful for it, Endre

Mar 22, 2019 10:57 PM #12
Rainmaker
966,835
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

In this better economy, it's easy to lose sight of what's owed on a home when listing and selling.  Smart advice, as always!

Mar 23, 2019 09:26 AM #13
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Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Endre Barath, Jr. How could you NOT give the bottom line when listing a property.

Mar 23, 2019 10:13 AM #14
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Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Thanks Jan Green Seeing a big listing price on your home is far from what goes into your pocket.

Mar 23, 2019 10:14 AM #15
Rainmaker
3,178,223
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Margaret I see so many who do not and they price it so ambitiously, just to get the listing, keep in mind the sellers all want top dollar.... I just explained it to  a foreign national seller what the Fed & State will withhold... it was the 'profit' they had in mind....Endre

p.s: no listing:)

Mar 23, 2019 11:19 AM #16
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Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Same here Endre Barath, Jr. We have to explain that to someone who has their home in another state. Six months and one day get them 'out of state residency' for Maryland tax. Until they are ready to sell. Then they have to pay Maryland out of state tax.

Mar 23, 2019 11:24 AM #17
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Margaret

This is such wise advice, for agents to think carefully  about early on for potential clients, but in particular for sellers, too. I have had a couple of homeowners who were interested in selling but it was clear that while they could sell they did not have resources to move on to something else. The right decision was made to not sell.

 

Mar 24, 2019 09:24 AM #18
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Margaret Rome, Baltimore Maryland
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Jeff Dowler, CRS There are times, as you mentioned, that  homeowners can not afford to move forward. We need to find this BEFORE they go on the market.

Mar 24, 2019 10:17 AM #19
Rainer
206,419
Robert Hicks
United Country River City Realty - Savannah, TN

Great read right here. I learned this lesson the hard way many years ago.

Mar 24, 2019 07:12 PM #20
Rainer
471,564
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Very interesting topic and comments, yet, something that all agents should know and illustrate when consulting with their clients, shouldn't they? 

Mar 24, 2019 11:59 PM #21
Rainmaker
497,441
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

This part of the conversation can be difficult. The annoying phrase I often hear is "I have to get X amount out of this house"  Sometimes it is a realistic number, sometimes to achieve it, a lot of work must be done to the house to get it market ready.

Mar 25, 2019 06:19 AM #22
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