MEETING WITH REALTORS
WHICH REALTOR DO YOU CHOOSE?
WHAT HAPPENS BEHIND THE SCENES?
IF THE PRICE IS RIGHT
DROPPING YOUR PRICE
Meeting With Realtors
Now that you have decided to sell your home, you probably have a pretty good idea of what you think it might be worth. In trying to be smart you call a few agents that you either got advertisements from or perhaps you got a referral from a friend. The agents you speak with each prepare a "Competitive Market Analysis" that suggests a specific sales price. You may even be surprised at some of them because possibly one of them may be lower than you expected. Even though they back up their suggested price with recent sales data of similar homes, you remain convinced your house is worth more, so you choose the agent with the price that is closer to what you think your home is.
Which Realtor do you choose?
Most people tend to pick the one that gives them the highest estimated sales price. It seems like they care about putting the most money in your pocket. They are willing to start out at your price and use the philosophy that you can drop the price later, this seems to make sense right? The truth is that, most likely, they are quite doubtful that your home will actually sell at that price and the intention from the beginning is to eventually talk you into lowering the price. This way they get the listing first, then worry about price later.
What Happens Behind the Scenes?
Truth is, if you start out too high on your home, you've probably succeeded in adding to your stress level, not good. There are a lot of things behind the scenes that take place while trying to sell your home, you don't want to add any more to it that you have to. The listing agent isn't typically the one to sell your home to a buyer. They primarily market and promote your home to all the local agents who have buyers. During the first few weeks of your listing you should get a good amount of buyers coming in to view your property and/or agents coming in to preview it.
If the price is right
If you've overpriced your home, fewer agents will preview your home, which means fewer buyers will see it as well. It is an agents job to know the local market and home values. If your house is priced high above market, they won't want to waste their time. Their time is better spent previewing homes that are priced realistically.
Dropping Your Price…Too Late
When you decide to drop your price later, your house is "old news" and you can't recapture that flurry of initial activity you would have had with a realistic price, causing your house to potentially take longer to sell. Let's say you do get a buyer to make and offer and contract on your house. They will need a mortgage, and the lender requires an appraisal. If comparable sales over the last six months to a year don't support the contracted price, the house won’t appraise and your deal falls apart. You can always attempt to renegotiate the price, but only if the buyer is willing too as well. Your house will likely end up back on the market. Once a home has been off the market and put back on has just sat on the market awhile, it is harder to get a good offer. It causes potential buyers to think your could be getting desperate, so they make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.