Many sellers simply do not realize how much competition from resale and new construction there is. Most buyers have a broader list of requirements for the home they will consider than the seller realizes, making more homes potentially workable for them.
Many sellers will reject their real estate agent’s advice about the condition or pricing of their homes because they are emotionally involved in their home and may be blind to the actual defects and conditions of the home. Many sellers will minimize the negatives, expecting that a buyer will accept them (the negatives) as they have.
Remember, a seller’s narrow idea of what a buyer wants may not work. In some cases, the seller’s idea of what a buyer wants - four bedrooms, close to school and park - may not be important to a buyer who wants nearby shopping and bike trails.
The seller will ask friends and family what they think of the price and the condition of their home, but the reality is that friends and family are not objective. They don’t have the experience and market experience that a real estate agent has to know what the market will accept and what the general trends are.
Often sellers compare (their homes) to homes that have different floor plans or features, homes in different neighborhoods. They might underestimate the cost or benefit of the upgrades or remodeling that similar homes in the neighborhood have. Sellers will often point to a sale of a home that seemed to sell for top dollar and want to price themselves compared to that one sale.
There is a saying in real estate that one house does not make a market, meaning it may be difficult to duplicate the buyer/market conditions that produced that sale. An appraiser will need to come up with at least three sales that support the value of the home. They cannot just look at one to arrive at the value.
Buyers very quickly become experts in the price range in which they are looking as they generally look at most of the available inventory comparing price, condition, location, and features. It is very clear to them if a home is priced too high for its condition or location.
If a buyer is willing to make improvements to a home, they will want the home price to be discounted for the cost of that improvement and more for the hassle factor. This may be well worth if for the sellers who are trying to avoid the hassle factor themselves.
You have hired a REALTOR for their objective, professional advice, for their knowledge of the market, advice in staging or merchandising the home, knowledge of financing, marketing skills, their knowledge of handling objections and their negotiating skills. To maximize the chances of selling your home in the current market, it will pay to listen to the advice that your REALTOR gives you. As your REALTOR for their honest opinion about price and the top things you can do to improve the show ability of your home.
If you are not in the financial position or do not have the time to improve the condition of your home, price it accordingly. If you are not getting the showing activity that you should be getting, examine your showing instructions and restrictions. If it can be easily shown and you are not getting showings reduce the price. Discuss a price reduction schedule with your agent. Insist on having regular market updates. Look at the data carefully to see if you need to make adjustments to your listing to be more attractive than the competition.
Byline: Laura Olive, CRS, CRP, ABR