How To Set The List Price of Your House
Surprise. You Don’t Get To Choose!
That’s right. You don’t get to name your price — the buyers do. Once you hire a listing agent, one who is familiar with your market, he or she will know the price that your market will bear.
Ideally, your home should be listed at market value, and with the help of a little staging, photography, and digital marketing, it should come off the market immediately thereafter with multiple offers.
But Many Sellers Try to Name Their Own Price
And Most Listing Agents Will Oblige, In Order To Get Your Business
Unfortunately, not all real estate agents are candid. And in order to get hired for the job, the agent will oblige, knowing that your home is over-priced. To make matters worse, the listing agent will have no price reduction plan in place as a backup option. So the home sits idly with no offers or showings for months on end. The sellers blame the listing agent for not selling the home and the listing agent blames the sellers for ignoring his advice. This is a lose-lose situation for everyone.
Avoid An Expired Listing
Have a price reduction plan in place. So for instance, if we agree that your home is priced 2% too high, then we will agree to lower the price by 2% in 2 weeks if you have no offers and less than 10 showings. This price reduction plan protects you from having a home that sits on the market for months on end with little to no activity. It will ensure that you get the most for your home in the least amount of time.
Never Choose A Real Estate Agent Who Allows You to Overprice
When choosing a real estate agent, most sellers don’t realize how important it is for a home to be priced correctly the second it hits the market. This is because a home that hits the market is not like a glass of wine that gets finer with time. It’s more like a glass of milk that spoils day by day. Once your home debuts on the market, it always goes down in value, not up.
Furthermore, even if you do get a buyer who is crazy enough to over-pay for a home, once the bank sends out an appraiser, get ready for the kibosh. No lender will ever fund a loan for more than what a home is worth — especially now. The lender will tell the buyer that if they want your house, that they will have to come out of pocket for the difference. And this is usually an expense that the buyer can’t fork.
The Longer It Sits on the Market…
The Worse Your Home Gets
In the buyer’s eyes, there must be a valid reason why the home hasn’t sold. Perhaps there are skeletons hiding in the closet or bones buried in the backyard. And if it sits for too long, it gets even worse. This is when investors begin coming out of the woodworks with low ball offers, adding insult to injury.
Listen to Your Listing Agent
If the listing agent is great, a seller should always adhere to the advice that a listing agent gives them. And to be fair, a listing agent should never (ever) be coerced into taking an overpriced listing. If you hire an agent who agrees to your pricing, knowing that your pricing is too high, expect disaster to ensue. If your agent isn’t assertive with you, how can you expect them to be assertive when marketing your home, protecting your interests, or finding you a new home?
Thinking of Selling It Yourself?
According to the National Association of Realtors (NAR), 89% of the population opts to hire a listing agent to help them sell their home. That means, 11% opt for the For Sale By Owner (FSBO) route, usually because they are attempting to pocket the commission themselves instead of hiring a listing agent. However, studies show that selling your own home is often a mistake.
- FSBO’s received 12.5% less for their homes than those who used a listing agent, which means that it actually cost them more money to sell it themselves
- Only 8% of the homes that sold last year were FSBO, which means the other 3% expired, withdrew, or canceled. Most of the successful sales occurred between family and friends.
- FSBO’s also complained that it was hard for them to understand the paperwork, price the home right, prepare it for sale, market the home, sell it quickly, and devote enough time to the entire process
Most FSBO’s Hire A Listing Agent 1-6 Weeks After Putting A Sign In The Yard
After giving it a go, they’re usually frustrated, upset, and very happy to take on the advice of an expert — Which is totally understandable after expending so much effort. And most FSBO’s say that they wouldn’t do it again.
You Only Get One Chance to Debut Your Home
So it must be done right. If you, or someone that you know, needs a listing agent, feel free to reach out to me anytime.