“Broker Bryant, how much do you think my house is worth?” Have you heard that before? How do you answer this question? In this more difficult market, my answer is always the same. “Well, I’m not here to tell you how much your house is worth. I’m here to tell you how much it will sell for?” There is a big difference between what a house is worth and what it will sell for. If you are listing homes right now at what they are worth you may just end up with a lot of listings that are just sitting there. In this more difficult market, pricing a home properly, has never been more critical.
I hear from Realtors all the time wondering why their listing is not selling. Usually they say the same thing, “It’s priced right”. Well, my answer to that is, "If it is priced right, it will sell". That’s right folks, homes are still selling. There may be record amounts of inventory but homes are still selling. My goal, is to make sure the homes that are selling, are my listings.
Well, Broker Bryant, how do you do that? First you have to get the potential Seller to look at reality. They have to forget about how much money they need and how much Mr. Smith down the street got for his house 9 months ago. You have to remind them that based on your suggested price they are still getting a 45% return on the house they bought 2 years ago. You have to keep reminding them of why they are selling.
My rule of thumb is, that if they “need to sell” i.e. job transfer, have another home under contract, financial difficulties, illness, divorce or just plain hate where they are living, then these are Sellers I can help. I will do everything I can to get them priced right, at selling price, and sold in 60 days or less. These are hot leads. These listings are what I am searching for.
On the other hand, if they are “want to sell” i.e. would like to have a bigger home, think we would like to pull our equity out and travel, wouldn’t mind moving to Georgia etc. These are Sellers I may not be able to help. They are going to be a little more difficult to get priced right and probably are going to want what their house is worth. I may not be able to help these folks.
With inventory at all time highs, I choose to be a little more picky with what homes I want to list. I only want “need to sells”. I know I can help them. And I know I will get paid for my efforts. I learned along time ago, that Sellers love you when you sell their house and talk bad about you if you don’t. No matter how good a job you did for them, if you don’t make it to the closing table you have failed. Personally, I don’t like to fail. If you work with Sellers, as I do, your success in this business is determined at the listing table. The listing table is your arena. This is where your money is made. This is also where your reputation is made. If you can’t get it priced right, then walk. Say “no thanks” and walk. It’s that simple.
I met with a lady today. She was a “need to sell”. She moved to Poinciana from NY about 2 years ago and she just does not like it here, at all. She is not happy, she does not like the school system and she wants out. She wants out bad. She has a beautiful 2900 sq ft pool home that is full of upgrades and just beautifully decorated. You know the kind, tile flooring, granite counter tops, crown moldings, wood floors, vinyl fencing and all the bells and whistles. She just had an appraisal done that came in at $369,000. After looking at her house and talking with her I agreed that her appraisal was right on the money and that her house was “worth” every dime of $369,000, if not more.
The problem is, she has the nicest house on the block, by far, and most homes in Poinciana are priced from $200,000 to $300,00. So I had to explain this to her and let her know that most people looking for a house in the $350,000+ price range are wanting to purchase in a $400,000+ neighborhood. This is certainly not Poinciana.
So after a good discussion, I was able to “Range Price” the house from $339,000 to $359,000 trying to sell as close to $350,000 as possible. In this case 5% below the house’s “worth” should be enough to get it sold. And since it is “Range Price”, $339,000 will be the MLS list price and this is almost 9% below “worth”. So my chances of selling this house are very, very good. She also agreed that if we don’t have any showings in 10 days I will be reducing the price another $10,000.
So folks the lesson is, be very picky on what listings you take. No amount of marketing in the world will sell an overpriced listing. Price it right and you will be the hero. Price it wrong and you and your name will be mud.
Is your listing priced for success or priced for failure?