When listing your home, deciding on price is one of the most important factors. You want to get the highest price possible for your home and ideally in the shortest amount of time possible. When working with a real estate sales rep to sell your house, make sure to ask them for a CMA (Comparative Market Analysis). This report will allow you to see what other comparable homes in your neighbourhood are selling for and how many days it took them to sell. This is an extremely valuable tool and should not be overlooked.
Real estate is not an exact science and the market does change. There are varying reasons why a home may be overpriced which are not automatically the fault of the real estate agent. Sometimes it’s the seller who has set the price or sometimes the market changes due to socio-economic factors, and can no longer support a higher price.
On the other hand, sometimes a listing is bought. What do I mean by that? Well, let’s look at the following example:
About a year ago, I received a call from a woman who wanted to sell her house. She invited to me come out to her home and give a price on it. I did so and after viewing the property, prepared a CMA for her. I went over all the comparable actives, expireds and solds in the area and explained at how I arrived at my final recommended list price. She wasn’t overly happy with my recommendation but did say that she understood why I came to that price.
A few days later, she called me again asking if I would list her home for $30,000 more than what I had told her. She went on to explain that after meeting with me, she’d met with another agent who had several more years of experience than I did and who also told her that her house was definitely worth the inflated price. I reluctantly told her that I just couldn’t as I firmly felt that it would be priced much too high and that it would be a great disservice to her if I were to do this. I warned her that a price reduction was going to be inevitable.
Well, that other agent got the listing. Eight months and one $20,000 price reduction later, it finally sold for the exact amount I had quoted her. I felt a little smug knowing that what I had predicted had come to fruition but that feeling didn’t last as it immediately sunk in that my reward for doing the right thing would be knowing that the other agent was still going to get the payday.
I did learn something from all of this though. I learned that sometimes it’s okay to let the seller set the list price, even if I feel it’s too high but to compromise by getting an agreement in writing that if there isn’t an acceptable offer within a set upon period of time, then we would do a price reduction to where I feel the property should be listed at. That way, hopefully, everyone can be happy.
‘Till next time,