It all starts with an owner been curious about the value of their property and asked themselves, how much is my house worth? I would like a real estate appraisal of my apartment? So they contact real estate agents and most owners make a decision to select a real estate agent based on the price they indicate to the owner.
So why do some real estate agents indicate a high potential selling price? Firstly they know they are a good chance of securing your business and if you are motivated to sell then they know you will eventually come down in price. The most common line from the agent after listing a property is “The market has changed”. In some instances the market can adjust, such as with an increase in new listings coming to market or if interest rates increase. However most of the times this is not the case.
From a seller’s perspective the agent indicating a high potential selling price is very tempting. You have lots of memories in the home and you are emotionally attached and you feel that the agent is more positive and more likely to achieve that price. Please remember that an agent can’t dictate the price of a home, the process, strategy and market forces are the main contributors to achieving the best price.
A good question to ask an agent before you select them is “if you can’t achieve the price you indicated to me then are you prepared to lower your fee?” If the agent talks about negotiation then that is a warning sign. If the agent agrees then they are likely to be confident on the price. Make sure this is included in the agreement. Our office implements a price guarantee on all sale properties. Contact us today to find out more.
So what happens when you list a property with a guide price or asking price that is too high and above market value? You will get less online enquires, less buyers inspecting the property, little or no contracts issued and likely no offers on the property. These are all signs that the property is priced too high about the market value.
As time goes on, you need to make adjustments to the price. You are likely to miss out on the strongest buyer interest, which is when a new listing comes to market. The longer the property is on the market then buyer’s perception is that there is something wrong with the property. However in most instances it is price that is the issue. You also need to consider the opportunity cost of selling your property sooner, it could be that you miss out on your dream property and were not able to act because you had not sold your home.
Therefore the process, timing, strategy, agent negotiation with the buyer and market forces which will achieve the best price for you.
Be informed and make the right decision to avoid one of the biggest mistakes owners make when selecting an agent.