I’ve been in real estate for almost 10 years and there are many things, on both the seller side & buyer side that can make it very interesting- but the following comments can be considered a little crazy…
“I’m not going to give my house away”– This can be very irritating when a seller says this, especially in my local higher-end market. When a buyer commits to a sale of a property that is over $1 million, how can this ever be considered a ‘give-away’? What the seller needs or wants to get on the sale does not always equate to fair market value. A home is not often worth what sellers invested in it or what some sites like ‘Zillow” suggest. A home is worth what a buyer is willing to pay for it.
“This offer is an insult” – There are many houses on the market at any given time. When a buyer makes an offer on a particular house – they aren’t intending to be insulting. They liked the house so much they committed to writing an offer. Sometimes they love the house and can’t afford to offer more, sometimes the buyer is more inline with fair market value than what the list price is indicating. If a buyer makes an appointment to see their property and cancels upon arrival, without even going inside to view it, then thats an insult! An offer is not an insult- its a starting point for negotiations. Sellers don’t have to like the offer- but at least its an offer. The sides may never meet- but it’s a starting point.
“We need to set the price high so there is plenty of room to negotiate”- Houses sell for fair market value. Period. Buyers know the market- and they know what has sold in the area and for what price- as all information is readily available online. Occasionally a one-of-a-kind property is listed and the right buyer shows up and the home might sell for a little bit more. But this is rare. And once in a while, a seller gets lucky and receives a better sale price than fair market value. But, more often than not, a home sells for the fair market price. Leaving room to negotiate is not nearly as effective as strategically pricing a home in such a way as to bring in several motivated buyers. Many properties sell in one day for asking price or even over asking. Although it’s counter-intuitive, pricing a home as close to market value as possible usually nets the best return. When a property is priced to leave room to negotiate the seller runs the risk of adding days on market- as this often slows buyer activity. The longer the house sits on the market, the lower the offers become. Buyers start to ask questions: “What’s wrong with this house? Why hasn’t it sold?” Sellers who try this strategy of overpricing may actually end up selling their houses for less than they would have if priced accurately. Buyers recognize value and act accordingly.
“The house sold too quickly. We must have set the asking price too low.” – This couldnt be more wrong. If a home sells quickly- it was priced perfectly! The buyers recognized the value of the home and responded quickly. Real Estate is a highly efficient market. A quick sale is a fantastic thing!
“Real estate agents make too much money — how hard can it be to sell real estate?” – I can’t think of many professions where people work for countless hours and spend countless dollars of their own money without any certainty of compensation. Depending upon how long the property is on the market- an agent can spend many, many hours just showing the property. They spend money on professional photography, videos, print advertising, brochures, broker luncheons, property websites and aerial photography just to name some of the immediate property related expenses. This is all to get the word out and put the properties ‘best look’ in front of as many buyers as possible. They spend numeorus hours consulting on the phone with both sellers and buyers, searching for potential properties, researching town records, plot plans & deeds. This is all before an offer is even received. Once an offer is received and negotiated, there are 3-6 hour inspections, possibly further inspection for pests, radon & water, sometimes hours negotiating back in forth on these inspection items, organizing work needed to address inspection items, working with attorneys in drafting the P&S, meeting appraisers, obtaining smoke & carbon monoxide certification and final utility readings…..this is all before the transaction ever makes it to the closing table. There are so many steps and lots of room for things to go wrong- buyers can walk away after an inspection, they may not get their financing, there could be too many requests following an inspection, of the seller- and if so, the process could start all over again. Some clients and transactions are straightforward and less time-consuming, but most if not all of the steps still need to be followed. This is seven-day a week job, for all hours of the day- which may include vacations, weddings and family functions. This job requires tremendous effort and commitment to achieve any level of success or a reasonable income.
Inspired by Ann Jones/Inman Daily Headlines 2/10/17