I remember several Federal elections ago, a reporter was talking to people on the street, asking who they thought should be the next PM? It was amazing how so many made comments like “I don’t like him, his eyes are too close together” or ‘I don’t like him, he’s short” or ‘he’s boring”. Forget the fact that the short fellow may be an excellent leader and just what the country needs, let’s vote for the Politician who looks great on TV, but has no substance at all. If you vote for a PM who has nice hair over the candidate who has substance, don’t complain when things go south. This is what is meant when it is said ‘the people get the Politicians they deserve’.
And this leads me to my point about buying listings. If you are looking to sell your home, you undoubtedly have done the research on what you home should fetch. When you are interviewing Agents, your sole purpose should NOT be what price they think, it should be what do they offer, how are they different, how would they market your home to get the sale and WHY they think this is the best way – it should all be justifiable.
Firstly, let me make a point. It is very difficult to use LISTED prices only to get a bearing on what a home should sell for in the market. The actual SELL price should be used primarily as this is the real value. Just because someone lists high, it doesn’t mean it will sell for that, so be cautious using such values as yard sticks.
Unfortunately too many people focus solely on the price and IF the Agent can basically guess the number in their head. The trouble is, as an owner you will usually have a higher expectation of your home than the market and secondly you are encouraging the Agent NOT to give an honest opinion, but to ‘buy the listing’.
What do I mean by buying the listing? Let’s assume a property should achieve $500,000 to $520,000 in the current market. Agent A knows this and suggests this range. The Owners of course feels their home is probably at the high end, but if they have done their research, they’ll generally agree. However Agent B also knows this. So this Agent B adds another $50,000 onto the price opinion. Greed takes over the Owner, and they list for $570,000 and the property sits there.
Eventually the Owner brings the price down over time but most of the Buyers have passed it by as being overpriced. Eventually it will sell, and most likely for less than if they listed it correctly the first time. This is because often when buyers dismiss a home, they don’t look at it again, or if they see a house on the market for a long time wonder what’s wrong with it or if it is on the market a long time, see an opportunity to pressure the owner with low offers as they ‘must be desperate’ as they dropped the price so much.
Hence, when interviewing Agents;
*Don’t get caught up on the price. Ask the Agent to justify with FACTS why they feel that price is appropriate.
*Don’t compare your home to others using listed prices only – use actual sales. All Agents should have access to these databases and should offer such at listing presentations.
*Be cautious of anecdotal ‘evidence’ and urban myths. Work off the facts.
*Selecting an Agent isn’t about them guessing the price you want. YOU set the price, the Agent doesn’t. The Agent’s job is to facilitate the sales process through to completion. This is where you should focus your questions. Ask what they do and WHY they do it – look for REAL reasons behind the actions. How does what they do assist you to help sell your home the best possible way?
*As tempting as it is, don’t get greedy. If you think your home is worth $X, and Agent A says $X but Agent B enthusiastically says $X plus $50,000 because ‘everyone else has undervalued your beautiful home’ – be careful. Overpricing your home will cause more pain in the long run. Remember just like with politics, you get the Agent you deserve.
Shawn
