In today's Agent Insights - Jane Peters - a Real Estate Broker in Los Angeles, California, shares the importance of selecting the right price for your client’s listing and not trying to force the market to offer a higher price.
Sometimes we real estate agents lose out on listings even from our old clients. It is generally not because of some failing or ours, or something we omitted in our presentation. It could be because the seller is impressed with the size of someone else’s team, or their flash presentation, or maybe the successful agent “has it all”. But I really think the choice of agent comes down to whom they think will bring them the most money.
So, why the title of this post?
I recently lost out on a listing from a client of mine. I did a great job for them and got them a home for a good price ahead of a surge of buyers who would most definitely have brought the price of the well-priced home up. When it came to selling another property of theirs I was asked my opinion, specifically relating to price.
This property is at the lower end of our market, and it was not a difficult one to comp as it is in a building with enough turnover to give an intelligent quote, which I did. My client thought it should be $20K higher than my estimate, which was O.K. by me. That was still within the margin of error. Well, I hear nothing and figure they are taking their time to list it. And then I see it come on the market with another agent and almost $70K over my original estimate. In this price range and for the kind of property it is, this is a significant rise in price.
You just know I am going to watch this property like a hawk. And sure enough, it’s like an accident. You just can’t look away.
I am presuming that my opinion was not trusted, and the successful agent gave them the magic number. But they were most definitely not servicing their client. At this point it has been listed over two months, a long time for our low-inventory market, and it has had 12, count them, 12 price reductions in that period, one as little as $500 . Now admittedly the agent is doing that to freshen the listing, as each change puts it in front of people’s eyes, but any buyer's’ agent worth his or her salt is not going to be fooled by that strategy. Also, buyers generally search for properties in a particular price range, so if you truly want to attract a new pool of buyers in the lower price market you would need to drop it by tens of thousands and not $500.
This listing is a prime example of why an overpriced listing will probably sell for less than if it had been priced at, or slightly below market price. This is an educated buying public, and they know an overpriced listing when they see one. In a sellers’ market with this low inventory having more than one buyer make an offer will usually bring the price over asking.
The average sold price vs list price is anything from 98% to 102%. This property is going to go at best at 92% of asking and probably less since it is at 92% right now.
I really can’t stop watching this accident waiting to happen. It’s only human nature to want to get the most money for your home, but you cannot force the market.
For the original blog post and more from Jane, visit http://www.homejane.com
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