When listing a home, sellers have tons of emotional connections and ideas of what the home is worth, and what they “should” be able to sell it for. Sometimes those ideas are in line with reality, but most of the time they are not.
It’s the real estate agent’s job to educate the seller on current market conditions and direct them to list the home appropriately based on what buyers are CURRENTLY paying for homes in similar size and condition. It’s cliche but it’s the truth- a home is only worth what a buyer is willing to pay.
As an agent, I’ve had to learn how to do this over time. Too often I’ve let the seller set the price. They say they don’t want to leave any money on the table, or, “Let’s just start as high as possible and we can negotiate from there”…..Well people, after agreeing to that in the past, I now know that is NOT the best strategy for the home, the seller, or me.
When you list your home higher than market value, you are missing a huge opportunity to attract the attention of all the buyers looking for your home, but in a lower (and correct) price range for that type of home. They simply will skip over your listing because it’s out of their price range. When it is sitting on the market forever with no or little activity, we start having to do price drops. Buyers wonder why no one has bought the home yet. They think, well they dropped the price, they’ll probably negotiate down even more. The seller’s desperation starts to show. It’s a bad downward spiral the longer it sits on the market. Then it is the agent’s fault because it’s not marketed correctly, or they aren’t getting enough showings, or whatever other reasons you can think of. It’s true, it IS the agent’s fault. But not because of those reasons. It’s because they didn’t properly educate the client on pricing.
When a home first hits the market, wouldn’t it be better to put it’s best foot forward? Make sure it’s in amazing condition, at the CORRECT market value, and buyer’s will come running. They may even have to compete with other buyers, creating a bidding war which could even drive the price up.
Value is an opinion, and a seller may not agree with what I think their home is worth, for whatever reason. But I do have the facts, the research, the market data. I educate my clients on their home’s true market value and best pricing strategy when listing their home. If they are on board, the selling part is easy.