Contrary to popular opinion, the listing agent does NOT determine the market price!
"Well, no big deal. That's fine with me,", I thought.
After listening to the voice mail, I realized that I had just lost a potential listing, and I was really happy about it. In fact, I am generally pleased when another agent takes a horribly overpriced home. I'm not pleased because I like seeing people suffer. Instead, I am happy that I have saved myself a lot of headaches.
I had a listing appointment last night, and I made a general comment to the sellers that I think bears repeating here:
Never choose a listing agent based exclusively on the listing price that they give you. They may be willing to list the home at a much higher price than other agents, but that will not make the market value of your home change at all.
Simply put, listing agents don't magically create additional market value by virtue of their advertising methods, or their good name in the community, or by any other method.
When listing a home, one of the key factors to consider (especially today) is whether or not it will appraise at the desired price. "Will a licensed third-party appraiser be able to justify this price?" If not, then the buyer can't get a loan for that amount! This will remove 95%+ of the eligible buyers, since cash buyers seem to be in short supply at the moment.
Here's a quick definition of "market value":
Market value is determined by the price that a ready, willing and able buyer will pay for a home. Period.
As Realtors, we all have access to the same basic data from the MLS system. With that in mind, we can all see the same comparable sales for every home in the area. We may differ on fine points, such as the perceived value of upgrades, location, and so forth.
When I am listing a home, unlike some agents out there, I want the home to actually SELL at some point, so I price it accordingly. Underpricing? Hardly. Market pricing? Absolutely!
In my entire real estate career, I haven't seen a time when the pricing was more important than it is today. With pressure from current economic factors, and the underlying related anxiety, home buyers want to make sure that they don't make the same types of price-related mistakes that were made over the past few years.
Price the home correctly if you want it to sell. I cannot state it more clearly than that. If a listing agent seems overly willing to go with whatever price you want for the house without any supporting data, be suspicious. Otherwise, you may end up wasting a lot of time and energy.
Thanks for reading!
Photo courtesy of The Rocketeer.
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