All recent indicators point to it being a strong sellers market…super low inventory, historically low interest rates, lot’s of cash on the sidelines too. It is the strongest sellers market I have seen since 2005.
But…be careful when pricing your home for sale lest you may miss this selling opportunity. It is always tempting to hire the agent that tells you the highest price. Unscrupulous agents are well aware of this typical seller tendency and often try to take advantage of it as follows:
Case in point: Earlier this year I met with a prospective seller to interview for the job of assisting them with the sale of their home. All went well EXCEPT for the portion of our meeting where we discussed the most likely selling price range. These sellers were of the opinion that their home would sell for about 20% more than my assessment. Shortly thereafter, their home showed up on the market with another well-known local franchise agent/team at the price they told me they thought it was worth. Now, not to be an “I told you so”…but after 3 price reductions and 5 months on the market, their home sold $8,000 below where I recommended it be priced initially. Buyers quickly become very astute in determining a homes value…there is sooo much information readily available that you’re not going to fool anyone into overpaying. And if you do, then you have to convince the buyers appraiser of the higher value too!
What is your home really worth?
In a way, that's a trick question. What your home is worth to you, considering the new paint and the children's park across the street, could be very different from what the home is worth to a couple who doesn’t like your taste in color schemes and whose kids are grown. So before you put a price tag on your home, read this:
CMA (comparative/competitive market analysis) : an objective point of view
Your home's "fair market value" is the price a buyer agrees to pay and you agree to accept. All homes ultimately sell at this price.
Instead of using subjective measures, the housing market uses a "Comparative Market Analysis" or CMA. It's the most important factor in determining what your home's fair market value is. A CMA compares your home to comparable homes, or "comps," in your neighborhood that are presently on the market, currently under contract and that have sold recently. Adjustments are made to account for differences in location, size, condition, upgrades, etc...
For $300 or so you can also pay for a professional appraisal of your home to get a state certified appraisers opinion of your home's fair market value.
When Your Realtor Suggests a High Selling Price, Beware!
· You’ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with a few local agents who’ve been mailing you cards. Each Realtor comes prepared with a "Competitive Market Analysis" and they each recommend a price.
· One of the Realtors has come up with a price that is lower than you expected and although they back up their recommendations with recent sales and current market data, you remain convinced your house is worth more.
· When you interview the next agent, they are much more in line with your own hoped-for value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.
A Dangerous Sales Practice Called "Buying a Listing"
· If you’re like many people who don’t buy or sell a lot of homes, you pick Realtor number two. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that really sees the value in your home.
· The truth is that you may have just met an agent engaging in a questionable and all too common sales practice called "buying a listing." He "bought" the listing by suggesting you might be able to get a higher sales price than the other agent recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price to where he knows it should be. (Or it could be that the agent is NOT being underhanded but that they are just new/inexperienced or plainly not very good).
Why do some agents "buy" listings this way? There are 3 reasons:
· The first one being that the agent realizes that you have to sell and they will eventually get you to reduce your asking price to where it should have been initially, even though it may be $10,000, $20,000, $50,000 or even $100,000 less then they told you they could get you on the day you signed up!
· The second one is so that they can do a neighborhood mailing and in that way get another listing “priced correctly” that they believe they have a chance of selling.
· The third reason is that they hope to get a buyer to call off of your sign or ad and that buyer will purchase some other (properly priced) house and the agent eventually gets a paycheck that way.
A seller who choose an agent based on which estimate is highest is the ultimate loser.
Selecting an agent by essentially “auctioning” your listing is a sure way to waste your time and miss out on a real buyer for your home.
Conclusion: Choose your agent based on honesty, reputation, ethics, experience, competence and marketing, and don't chase after those tossing around pie-in-the-sky numbers.
As always, thanks for reading,
Steve Jackson: 561.602.1258
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