How often many agents will go on a listing, give the seller a fair market value of their home, then see it listed by another agent for thousands or even tens of thousands more. And then see it months later at a lower asking price and maybe selling or not selling at all.
”Seller needs/wants to get”, syndrome. One of the most difficult situations for a seller is when they need to get so much from the sale of their home. Unless, the seller needs what the house is worth, it never happens. The seller may ask a price but a buyer sets the value. Today’s buyers are savvy and know value. They find it on several real estate portals, and/or they rely on their real estate buyer’s agent who has the same information that a seller’s agent has. Therefore, if a seller wants/needs more than what the market will bear, they should either not place it on the market and wait until the market catches up to their price, which in the current state of the real estate market, may be years, price it at market value, or if it is a short sale situation, just get it on the market at the right price (or a little below) and get it sold.
“Seller wants to try it”, syndrome. Personally, I am advocate of never trying anything – either do it or don’t. Because when one goes in with the attitude that they try it, they are usually doomed to fail. (I see that all the time with new agents in real estate. Those who say they came into real estate to try it, never make it.) It is the same with selling a home. If one is committed to selling a home whether be by choice or by necessity, it will sell because the home will be priced to sell.
“Need to have wiggle room”, syndrome. There was a time when the wiggle room pricing did work, probably up until the mid ‘90’s before Buyer Agency came into play and more so when the internet became a part of a buyer’s real estate search. Prior to 1995, real estate professionals represented the seller only, whether they had the listing or a buyer for a property. However, when the “White Paper” was passed, buyers could now be represented by an agent. This allowed the agent to help direct the buyer to make an offer based on recent sales and not just on what the buyer’s heart was telling them. The second part of course, is the role the internet plays in placing a value on real estate. A buyer sees everything on the market and compares those homes in their price range based on what they view and click on and not based on a seller’s idea of wiggle room.
“The real estate agent said they can get it for you”, syndrome. That is the most egregious act by a Realtor. It preys on the emotions of the seller. By having the seller believe that by using that agent, they will defy the market is a true disservice to that seller. It is also a Realtor Code of Ethics violation (Article 1; SOP 1-3). The scenario goes like this: The seller, doing their due diligence, will call in 2-3 area Realtors to give them a pricing and market analysis. The seller will get 2 that are similar prices and one that is higher than the others. The seller will question the agent as to why theirs was higher and the agent may say, I believe I can get more and if not at least you can try it and if it does not work we can lower it. The seller gets excited with the possibility that they have a chance to get more money. Weeks will go by until eventually the agent asks the seller for a reduction in price or even worse, the agent never talks to their seller and the home never sells. Reducing the value of the home.
So why would an agent go through the hassle of misrepresenting the value to the seller? One reason, and one reason only, to get the listing. It gets a sign in the ground, their name on the sign and in an ad. Which, in turn, may get them more chances to get more overpriced listings.
Trying to sell a home at a higher price results in selling a home for less than what the home would have been sold for if it was priced correctly in the first place when it does eventually sells. The value of a home depreciates as it stays on the market longer. So the seller continues to chase the market to eventually find its market. Plus I never like to see “price reduced” on a sign. It scares off potential buyers. Buyers cannot be fooled. It is funny but when a buyer offers a low-ball price for a listed home the home-owner gets insulted, by overpricing a home, the buyer’s intelligence is just as insulted. Buyers do not buy overpriced homes, and they do not usually make offers on those homes either. Therefore the “try factor” only brings frustration to the seller and the agent. Either sell it or not sell it.
If you are interested in buying or selling or for more information on pricing your home for sale, contact Coccia Realty at 973.377.4400 or firstname.lastname@example.org.