RealTown's RealTalk

Jim Downs asked:

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.

Andi responds:

Just learned something from Larry Kendall at the Realtor Rally in Denver. Add one more line to your Seller Net Proceeds sheet:

Monthly carrying costs: To include mortgage payment, utilities, HOA fees etc etc

And multiply that answer by how many months you think it will take to sell at the price suggested by the Seller.

I used it on existing listings and got 2 immediate, substantial, price reductions.

Mack and Andi Durbin, Brokers
Rooftop Realty
Serving Metro Denver since 1976
303-881-8844
www.rooftoprealty.com
Visit our blog at www.rooftopviews.com
30 years of doing whatever it takes

"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.

Jim Downs"

I have turned down more listings in the last year than I can ever remember turning down. I tell the Sellers that we are in a price driven market and the market is what the market is, I can't change it. I also tell them if they really do not have to sell, they should wait to put their home on the market when the market catches up to their price. I tell them that I'd rather be upfront with them now, than have them disappointed in me later. Interestingly enough, I have not seen any of these listings I've turned down, list with another agent.

Cordially,

Lynn H. Wilber, GRI, e-PRO®

Broker - Associate

Downing Frye Realty, Inc. - Naples, FL

Office: (239) 594-2780

Fax: (239) 594-2781

MailTo:Lynn@NaplesBuys.com

Websites: www.NaplesWave.com

Blog: www.NaplesWave.com/NaplesBlog

P.S. Do you know anyone who needs real estate advice? Please feel free to E-mail me their contact information at Lynn@NaplesBuys.com and I will be happy to help them.

It is very difficult to get sellers to come to the realizing that the market is going to affect "their home." It seems to be okay for their neighbor to lose $100K on their home but they don't think it will happen to them. I feel like it is a gentle process with my clients and sometimes we are in a losing battle because it keeps the price always one step behind because it takes so long to get them to the right price. When I go to the listing appt I always talk about the reality of pricing and they agree but when it actually comes down to lowering the home $50K it is just like pulling teeth.

Any ideas for keeping clients mentally ready for the almost weekly price reductions that must take place?

Thanks for the thoughts,

Tauni

Tauni Affinito

cell.775.846.4147

Ferrari-Lund Real Estate

Certified Negotiation Expert

Your Personal and Professional Realtor

Member of Executive Women's Golf Assoc

website:ferrari-lund.com

tclark@ferrari-lund.com

I agree with you. My area of sales is a very rural area, where most properties are passed down to a family member rather than being listed. However, it only takes one seller who believes his house is worth more than it is to cause the neighborhood to be flooded with over-priced homes. My buyers are very aware of what houses are worth in this area, and they have stepped back from looking here because they refuse to pay the price.

Unfortunately, sellers are also influenced by friends and family who tell them their house is worth more, or advise them to price it high so they have room to negotiate when a buyer tries to "low-ball" them. Then they want to know why their house isn't selling!

Tauni Affinito says:

It is very difficult to get sellers to come to the realizing that the market is going to affect "their home." It seems to be okay for their neighbor to lose $100K on their home but they don't think it will happen to them. I feel like it is a gentle process with my clients and sometimes we are in a losing battle because it keeps the price always one step behind because it takes so long to get them to the right price. When I go to the listing appt I always talk about the reality of pricing and they agree but when it actually comes down to lowering the home $50K it is just like pulling teeth. Any ideas for keeping clients mentally ready for the almost weekly price reductions that must take place?

=========================================================

 

Tauni

 

I would suggest NOT making weekly price reductions. Save them up and make one VERY DRAMATIC price reduction that will attract attention and get you ahead of the market. This should have the effect of creating quite a bit of interest.

It is very difficult to get sellers to come to the realizing that the market is going to affect "their home." It seems to be okay for their neighbor to lose $100K on their home but they don't think it will happen to them. I feel like it is a gentle process with my clients and sometimes we are in a losing battle because it keeps the price always one step behind because it takes so long to get them to the right price. When I go to the listing appt I always talk about the reality of pricing and they agree but when it actually comes down to lowering the home $50K it is just like pulling teeth.

Any ideas for keeping clients mentally ready for the almost weekly price reductions that must take place?

Thanks for the thoughts,

Tauni

Hi Tauni,

 

I think we're in similar markets. I'm in south Florida and dealing with this same situation. I don't have the answer, but we were just talking today how the news talks about the high inventory of homes we have. A large part of the problem is the sellers you speak of who refuse to price their homes where the market demands they price them. The inventory is high because it's almost like dead inventory when you have sellers who refuse to cooperate. Either they want to sell or they don't. Twice in the last month, I've had sellers play hard ball with my buyers in this market. It's crazy. We're in a price-driven market in south Florida. This isn't the time for sellers to play hard ball.

 

As for getting the sellers mentally ready for price reductions, I wish I had the answer. Nobody likes to lose money. If someone comes up with it, I'd like to hear it as well.

 

Best,

Elyse

 

 

Elyse Berman, P.A., e-Pro

Realty Associates Florida Properties

9174 Glades Road

Boca Raton, Fl 33434

Cell: 561.716.7824

Fax: 561.451.9377

Email To: Elyse@ElyseBerman.com