PRICE THE PROPERTY TO SELL 3 TIMES
A lot of agents will recommend a home owner price the home higher than the market will bear. I've written a great article on why this is not a good idea. You need to remember that you will need to sell the home three times during the process. The first time will be to the Buyer Agent. As you all know a Buyers Agents job is to work for the buyer finding properties that meet their needs, making recommendations on value, pointing out potential pitfalls on condition and resale values. If you over price the home from the beginning you run the risk of Buyer Agents passing on your listing for their clients.
The second sale comes from the actual buyer. And as we know buyers have access to more information on pricing than ever before. Need I say more?
Finally and most importantly, you will need to sell the home to the bank appraiser. We often forget and our listing clients do not think about the fact that the majority of home buyers will require a mortgage to make the deal happen. The appraisers are bound by certain rules of appraising so they do not care what you say the home is worth, what the seller says its worth, and they do not care what the buyer has agreed to pay for the property.
Also, it important to remember that upgrades that the home owner has made will be adjusted for what similar upgrades in the area are going for. For example if your home owner went crazy and added a 50K pool, but the local market only supports 20K for a pool, the appraiser is likely to only add 20K on to the value for the pool.
Having this discussion with your sellers can help with them to understand its important to price the home realistically from the beginning!
Happy listing,
-Ron
A lot of agents will recommend a home owner price the home higher than the market will bear. I've written a great article on why this is not a good idea. You need to remember that you will need to sell the home three times during the process. The first time will be to the Buyer Agent. As you all know a Buyers Agents job is to work for the buyer finding properties that meet their needs, making recommendations on value, pointing out potential pitfalls on condition and resale values. If you over price the home from the beginning you run the risk of Buyer Agents passing on your listing for their clients.
The second sale comes from the actual buyer. And as we know buyers have access to more information on pricing than ever before. Need I say more?
Finally and most importantly, you will need to sell the home to the bank appraiser. We often forget and our listing clients do not think about the fact that the majority of home buyers will require a mortgage to make the deal happen. The appraisers are bound by certain rules of appraising so they do not care what you say the home is worth, what the seller says its worth, and they do not care what the buyer has agreed to pay for the property.
Also, it important to remember that upgrades that the home owner has made will be adjusted for what similar upgrades in the area are going for. For example if your home owner went crazy and added a 50K pool, but the local market only supports 20K for a pool, the appraiser is likely to only add 20K on to the value for the pool.
Having this discussion with your sellers can help with them to understand its important to price the home realistically from the beginning!
Happy listing,
-Ron
posted by Ron at 6:55 AM
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