The Price Might Be Right
Let the bidding war begin
You've got a great house. You've fixed most of the problems and even given the place the ever-insisted-upon "curb appeal."
You've got a great real estate agent; you've done your homework, and the daily headlines – regionally and nationally – insist Colorado's real estate is becoming some of the most desired and expensive in the country. Let the bidding wars begin.
Though the current real estate climate would suggest that today's scene is a “seller’s market,” don't get overly confident and overprice your property. It’s a classic mistake made by many owners, especially in a hot seller’s market. There are so many internet platforms, and everyone has access. It is easy to be lured into thinking your property is far more valuable than may be true. The reality is a savvy property owner should listen to his or her real estate professional who is using years of knowledge and a massive database to properly price your home.
Here are three very different scenarios, all experienced this July by a real estate agent in our office:
1. While preparing to list a home in a popular neighborhood, the agent prepared a Comparative Market Analysis (CMA) to accurately gauge the appropriate price to list the home. The seller felt the agent was being far too conservative in her estimate and requested a list price far above what was suggested. The seller’s knowledge came from a very popular website and had no basis.
A compromise was reached, but the home was still overpriced and languished on the market – It wrangled few showings and no offers. A couple price adjustments still did not produce any offers. Finally, a buyer came along and made a low offer.
At this point the seller was weary of showings and capitulated to the low offer. The irony of this story is that the low offer was several thousand less than what the agent had originally suggested. The moral of the story is that buyers will not bother to look at properties they think are overpriced. Once a seller starts lowering the price there is the perception that there is something wrong with the property and buyers sense that there is “blood in the water.”
2. In this scenario, the agent prepared a CMA that was nearly $100,000 less than the seller thought his home was worth. However, in this situation, the seller decided to trust the agent and list at the suggested price. On day one, we had two showings: One of which produced a full price offer. Perfect, right? Not! The buyers still wanted to feel they were getting a great value and asked for some inclusions that the seller was not willing to provide. After many negotiations, a price was reached that seemed fair to all concerned. This story is continuing and both agents involved in the transaction are doing a masterful job of representing their respective clients, which illustrates the importance of a professional real estate agent who has years of experience to draw upon when it comes to sensitive negotiations.
3. This scenario is a situation where everything goes right. The seller desired a quick sale of her home due to a personal need. The agent prepared a CMA with a price that took her needs into account and the home went on the market just below anticipated value. This produced a frenzy of showings and created a “multiple offer situation.” Ultimately, the home went under contract at $15,000 more than list price. The seller was very cooperative, and every negotiation went smoothly, with compromises reached quickly. Both agents are seasoned professionals and their clients listened and incorporated their advice.
Time is money. So is effort, languishing (no offers) properties, unexpected stalls and failed agreements. Having the day-to-day, hands-on experience that a seasoned pro has, particularly one with specific knowledge and interest in your neighborhood, inevitably pays for itself.
This isn't about justifying or otherwise pitching the value of an agent. The reality is that, when your real estate sale is approached with a true, real-estate knowledge-base, 99 percent of sellers get what they want for their property, sometimes more than they initially want. A careful selection of an excellent, winning-track-record professional helps the selling process, and most often secures you, the seller, the best market price – all within a great time-frame.