RealTown's RealTalk

I don't know if this will work or not - here's the scenario - I get a call from an owner that wants me to list his home. Great I said blah blah blah I get more info on his home and go and meet with him. In toe with what the range of his home price should be - it's a 4br 1.1 bath - although clean - no updates - kitchen is very outdated, bathrooms - my range $369-$379k - his thinking $550k! why does he think this because I sold a home around corner from him for $580k that's why he called me. No comparison obviously brand new const. 5br/4ba gorgeous... I didn't have the heart to tell him that night my thoughts - and pretty much to myself I figured let me double check my figures! anyway - 2nd meeting - he was very annoyed at me when I did give him my numbers becuase he had people in the range of low 420s-430s and even one that had it for 510k - guy is a statistician so I'm not going to beat him at his own game - so I said to him - I will send you similar homes in your neighborhood that are active, under contract and solds (makings of a CMA) - and told him to have at it - #s don't lie. Told him to wait if he wants to sell at higher price - told him other realtors giving you those #'s are doing you a disservice just to get business... I don't understand who would do that purposely - I did that when I was a newbie for sheer lack of knowledge!

Maha

I have asked myself, other agents, and at weekly meetings and this is what
we come up with. I ask the seller :when he was a buyer, then explain how
different the market is now. I try to educate them that even though the
market is different, the buyers are still looking for a good deal and the
prettiest home. If you can't win both contests then the buyers agents and
the market doesn't approve of the list price, so no traffic. Honesty is
primo! Walk away and let someone else list it but keep your eye on the
property and call when listing expires or is cancelled and try again. They
might listen to you this time depending on their motivation. OR if they
aren't nagging clients, list it at what they want and get sign calls.
Barbara Franklin
Associate Broker, Realtor
505-275-5386 Office
505-934-1684 Mobile
505-271-5686 Fax
email: franklin@swcp.com

Elyse responds with:

LOVE this method to show Seller right up front what Time on the Market will cost them on their Net Sheet! Thanks for sharing it us.

I've always approached the CMA explaining one's property value is determined in different ways: 1) An insurance company looks to the cost of replacement when stating value; 2) There's the Value established by the Tax Assessor (who has most often never been in the home); 3) There's the value a property holds to the property owner which is untouchable because memories & a lifetime spent in the home are worth millions -- and though I'd love to put a 5 million price tag on their home (it'd be a great commission... :), pricing too high ultimately yields a net far less than if priced correctly from the beginning; . . . 4) what we need to look at is what today's Buyers are actually paying for properties similar to yours. Those numbers alone dictate a property's value to buyers in today's market.

Lori K.

5/1/2009 @ 1:40 PM HST

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Jim Downs:

Need your help in developing a response to a reoccurring issue concerning pricing a home: Pricing that reflects the market value not what the seller thinks the home is worth.

<<

Aloha Jim:

I have two strategies that combined, usually works.

1. If we're in a declining market, I ask sellers "Do you want to chase the market down or lead the market down?"

2. I ask how soon they want to sell and let them know that they have the best chance of getting the price and terms they want in the first 30-45 days on the market; the next window is 6 months; and the next window is a year.

If a seller tells me they're OK with 6 months or (even worse) a year, I offer to refer the listing to another agent who specializes in overpriced listings.



With Warmest Aloha,

Ruth A. Gabbard (R), CRB, CRS, SRES, PB
Gabbard Hawaii Properties | Honolulu, Hawaii
808-534-1850 | 877-ALOHA HI (256-4244) Toll Free
Listserv E-mail: hawaiihomes@alohamls.com

In regards to "right pricing" Ruth from Hawaii is the only correct responder with:

"I have two strategies that combined, usually works.

1. If we're in a declining market, I ask sellers "Do you want to chase the market down or lead the market down?"

2. I ask how soon they want to sell and let them know that they have the best chance of getting the price and terms they want in the first 30-45 days on the market; the next window is 6 months; and the next window is a year.

If a seller tells me they're OK with 6 months or (even worse) a year, I offer to refer the listing to another agent who specializes in overpriced listings".

The story goes like this "the higher the price the longer the wait the lower the price the quicker the sale". Which way do you want to liquidate your debt? You can wait for the market to turn around and come to you or you can lower your price to what a buyer is willing to pay and get out before the appraised value falls below what you paid or God forbid what you OWE! Yikes!!!!