Price Reductions Aren’t Needed!

Many real estate agents out there are telling their sellers that the only way to sell in this buyers market is to continue to reduce their price. Many times the price reductions are 5% or more at a time. This is a lie! The truth is the home should have been priced properly in the first place.

Now I don’t know about you, but I would be really upset if an agent had mislead me into thinking that one price was correct and then turned around and asked for repeated price reductions. The problem is that many agents refuse to tell you the truth during the listing interview, they are to worried about getting the listing to risk telling the truth.

Here is what it looks like. The agent comes in knowing that the most your home could ever sell for is $XXX,XXX but Mr and Mrs Seller say that they “need” $50,000 more then the market value for your home.

The real estate agent makes a huge mistake and they take the listing at this higher price. They give you the false hope that your home just might be worth more then every other home in your neighborhood. This false hope ends up costing you thousands and thousands of dollars.

Let’s use the example of the home that is $50,000 overpriced. The problem is that after a home is on the market for an extended period of time even a price reduction of $50,000 isn’t going to sell the home. When the home is first listed you will get the most traffic and have the highest chance of selling (if priced correctly). If you wait 3-6 months to lower your price buyers may not even be willing to look at your home.

Why would that be? Many home search programs allow buyer to not look at homes that have been on the market over XX days, they get to choose how long that is. Plus many buyers and real estate agents figure when a home has been on the market for 6 months there must be a problem with the home. This means you are going to have much less traffic then you had at the start of the listing and will have to price your home below market value to get it sold.

Overpriced homes almost always end up have to selling below market value. Overpriced sellers end up wasting months of your time, countless hours cleaning your home for showings, and end up netting much less money then if you properly priced the home in the first place.

So while interviewing real estate agents please make sure to do your homework. Ask what percentage of their listings sell, what is their average days on market, how many homes have they sold in the last 90 days, and what is their average List Price to Sales Price ratio (example: they originally list it for 100,000 and sell for 90,000 then it’s a 90% ratio…not very good). These couple of stats will give you something to compare agents and if an agent doesn’t know their stats they most likely aren’t doing much business.

Even in todays “Buyers Market” homes that are priced correctly are selling. If you are interested in hearing about the Suburban House Hunters Team’s marketing plan and past track record for selling homes feel free to contact us.