-Sellers tend to overprice and spend a tremendous amount of effort trying to defend their price, even if the market doesn't support it.
-Pricing a home correctly is a partnership between sellers and their agent, not a battle of wills.
When it comes down to it, the most important advice a real estate agent can give sellers is how to price their home. No matter how beautiful or well-maintained a property may be, how many upgrades it has or how well it shows, if a home is not properly priced, it’s going to be a tough sell (or not sell at all)
The battle for agents most often lies with aligning what sellers’ think their home is worth with its true market value. These disparate realities can be difficult to merge when working with a seller to set a list price or on a price adjustment. Here are seven pricing myths that often get in the way.
1. It is better to price the home on the high side because the seller can always come down
2. If a home is priced just right, a seller risks leaving money on the table.
Actually, the opposite is true. A well-priced home tends to generate a lot of interest and can result in multiple offers. A shorter marketing span brings strong offers that could result in a home selling for over asking price. Buyers are less likely to play “let’s make a deal” and nit-pick every little thing; they feel the urgency of competing with other interested parties for the same house.
3. The price gets better with time.
4. X price is as low as the seller will go.
When faced with an offer that is less than what they want, sellers love to draw a line in the sand and dig their heels in over an arbitrary number that they deem to be “their bottom line.” Who decides what a property is ultimately worth anyway? Buyers see the glass as half empty versus half full, and in some markets and real estate cycles, they are holding the cards. Sellers can decline an offer based on a number, but they may never get there with another buyer, and a subsequent offer may be lower or layered with conditions and complications.
5. An offer should come in close to asking price.
Sellers are often disappointed at the initial price when an offer is received and ask “why so low?” Does a seller really think a buyer is going to be generous with their initial offer? Unless it is a really hot property, priced aggressively or in a low-inventory market, no buyer is going to willingly offer more than they have to, especially on a first pass. They want to get a sense of the seller’s flexibility or lack thereof before deciding their next move.
6. Outdated features shouldn’t impact the selling price.
7. The buyer’s offer is simply too far off the asking price to counter.
A bird in the hand is worth two in the bush. A buyer has stepped up and put pen to the paper with a proposal. An offer is an invitation to negotiate and begin discussions about the property. It can be easy to get offended, but it’s best to keep emotion out of negotiation as much as possible and work in good faith with what’s presented. A seller will learn quickly if it looks like a transaction may come together.
Pricing a property is a delicate dance. The bottom line is that the market doesn’t guarantee as strong a price as sellers usually want or expect — unless the home is a highly sought after, rare type of property. Setting the stage with the right pricing will often set the tone for how smoothly the listing experience will unfold.
Looking to Buy, Sell, or Invest? Contact:
David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® BRE# 01905183
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