Selling Real Estate is an ART - not mathematical rocket science. There are no rules, no absolutes, no equations to determine an exact price in most cases, and no way to determine the time needed to sell the property, or where to find the buyer.
There are however lots of tips and techniques that can be used, by someone who understands the business - to sell your property.
Sure there are things we call RULES such as the maxim that value is determined by location - location - location.
There are averages regarding the "numbers system" and how much advertising it takes to get how many people to contact us and how many contacts for an appointment and how many appointments for a contract and the average commission and the average price per property... And, there are communication skills, marketing, advertising, and promotion skills, negotiation skills, phone skills, email skills, writing skills and the list goes on. But there is no science.
Underneath the abilities of a successful Realtor are thousands of hours of training and years or decades of experience; built upon that is attitude and professionalism, ethics, legal knowledge and skill, math skills, computer skills, research skills; and built up that are abilities and skills of planning, goals attainment, management, teaching skills, and leadership skills.
At all points there must be proven abilities in all these things and many more because theoretical knowledge means nothing. Finally there is the art of pulling it all together quickly, efficiently and the constant, daily quality control of making planning become actuality! Then, usually the Realtor is paid some fee.
Selling your property:
When you decide to sell your property you want the most money you can get for it; as fast as you can get it, so do we. We get paid based on the ACHIEVED sales price; but neither of us gets paid if it doesn't sell. If it doesn't sell both of us lose money. You lose money by paying a mortgage too long or by having the property require more repairs as it physically depreciates. All property except raw land does depreciate unless you spend time and money to keep it up.
Very few people accept what the Realtor knows is true about the actual value of the property; let's be honest; we've not had one person take our word for value in decades. Even my own family, all of whom are professionals in various factions of the Real Estate industry, are never willing to sell a property for what it's really worth. We all want just a little, or a lot more than the market allows.
We can push the values up, up, up, with aggressive marketing and salesmanship - that is what we do - we push, market, advertise and sell to get the value and selling price of your property UP to far more than what it would sell for without us. That is what we get paid for. Even Realtors who assume they know a geographi market or a type of real estate they are not proven expert in, are usually rudely awakened when they attempt success.
We are expert Technicians - NOT magicians! We can not ordinarily take a $30,000 property and sell it for $100,000 or a million dollars; although we are expected to be able to do almost that at times. If a property is going to be listed above the market value it will take better marketing, a longer time to market it, and it will have to be showcased to its maximum potential. The showcasing is the responsibility and cost of the seller, the rest is our responsibility and cost.
Usually the FIRST FACTOR in a buyer's equation, as far as which property to look at, is based on price. Second is the buyer's perception of the relative value of the property; which they gain from the Web sites and from printed pictures and from driving by the property. They could care less that you WANT to sell your property for. The buyer wants to buy it for less than market value not more. and if your property is obviously priced above the market, nothing we can do will get it shown or sold. Herein lays the difficulty of our profession.
Yes, we can ask any amount of money for your property. You can direct us to ask any amount that you want to ask; however it is the purchaser that determines how much the property will sell for, not us, not you. That being said, there are things you can do to increase the price and perceived value of the property. You can dress up the property to place it in its most attractive light.
We can do a lot to get maximum price as well. We can market the property to expose it to thousands of people and hundreds of other Realtors; we always do that and we do that well, very well, far better than most. We have hundreds and thousands of people and out of town Realtors who are coming hourly to our web sites just for real estate. We put your property on the Multiple Listing Service, just like most other Realtors, to expose it instantly to all other Realtors in our area.
The prudent and service oriented Realtor, and we are - carefully write the copy for the Multilist and we carefully enter your property in all the possible ways it can be entered to make it easier for others to find your property. We do this far better than most others do, far better! We go out of our way to help all the other Realtors find your property and sell it for you in addition to ourselves. We go out of our way to include all the information a buyer or another agent needs and wants to know so that they are knowledgable and interested in the sellers property, before they contact us.
We have signs to capture the dozens of people looking for property in the exact location as yours, who may be riding by. Since we show your property location on the Web with a location map, the sign helps assure a person who has seen the web site and wants to drive by and check it out. We contact all the neighbors, at their home address (wherever that may be) so that they can invite friends and family to purchase something in the neighborhood they love and where they have purchased. Signs are valuable but we do all the rest as well. Print ads are the least effective form of advertising these days; but that is another article. Our thousands of informative post cards that are sent out each month are a major factor in getting people to know about your property; the cards and sign, of course gives them our web site address where they can see your property showcased to maximum advantage, with all the pictures, price and full information.
Let's get back to the point. Pricing a property correctly will make more money for you.
Your Realtor should bring you a Comparative Market Analysis which will show you how much other properties have gone for in your nearby areas that are in some ways similar to yours. We all know you want MORE than that amount and in your position so do we. The way you make more money is to price it to sell in 30 to 60 days or more if you wish. If your property sells in less than thirty days, it is possibly priced to low; however in some markets if it doesn't sell in a day or two, it is priced too high. Your Realtor, a top agent in your area - Knows. If it sells in more than four months, it is possibly priced too high or does not look like it's worth the asking price from the prospective purchaser's point of view.
One of the worst problems in pricing a property too high or not having it on the multilist properly is that it does not attract other Realtors to bring their clients to buy your property. Property pricing, done sensibly, does result in a faster sale. Property pricing, done properly, does result in more interested calls and thus gives us more of a chance to talk up the property honestly and enthusiastically, to get someone out to see it. Pricing a property too high makes the property boring to other Realtors and to the market in general.
Most buyers ask how long a property has been on the market at the asking price and if any offers have been made. They know that time on market and price or a reduction, is a direct gauge of how well it's priced. Typically properties, especially homes that are priced most correctly to begin with -- sell for more than those that are priced too high to begin with.
There are several reasons a seller prices a property too high:
The primary reason is that the Realtor takes the direction of the seller after advising them correctly and prices the property higher than it should be. We are supposed to do that. We are supposed to price a property exactly the way the seller tells us to after we advise them. The second reason is that the Realtor prices the property too high in order to not lose get the listin so that another agent won't get it. There is always another Realtor who will take it at the higher price the seller hopes to get.
We also have some real estate agents who will do what is known as "buying the listing" by pricing the property too high on purpose so that no other real estate agent will be considered competitive by the seller. Whenever you see a Realtor with most of the signs in an area where there is a very competitive market place you should check to see if they customarily price their listings way too high. If the signs stay up for more than a few months, the prices are probably way too high for the current market.
Another reason for pricing a property too high is that the seller wants room to negotiate. The purchaser will always be willing to negotiate. down, but if the price it more than 5% above market value most buyers will just pass you by and never make an offer.
Most of the action on your property will ordinarily occur in the first few days or weeks after placing it on the market. There is a pool of prospective purchasers who are waiting for a properly priced property - just like yours. If yours is priced to high, they will just keep on looking and we'll not find out who they are or that they are even looking. These buyers have seen most or all of the properties in the market in your price range and general location. They know values to within a couple of percent, at most, and they are looking for properties under-listed not over-listed in price. They will not even take a look at an overpriced home.
Sometimes a price reduction will still fail to attract interest as the property is no longer fresh on the market. Realtors especially, are hard to attract to your property, with the buyers they have who have been looking for a property just like yours. Those Realtors know the buyers they have are very savvy regarding prices and values and they don't dare call them on an overprice property and lose the delicate allegiance they may have, of a prospective purchaser.
Overpriced properties do one thing very well. They help the other, more correctly priced properties in an area to sell more quickly - while the overpriced one languishes. It is our duty, the duty of any Realtor, to provide you with a comparative market analysis - which is a comparison of recent homes in your area that are in the categories of; sold, still on the market and have been taken off the market, along with the times they spent on the market.
There is no exact price and no exact formula. Every property is worth exactly what a buyer will pay for it. Thus, the market place determines the value. The seller determines the asking price with the advice and help of the Realtor. If the asking price and the market value are equal - the property is SOLD. If the seller thinks he can just price a property foolishly high and find a fool with money... so far in 35 years I've not seen it happen.
Realtors have no control over the market, only the marketing plan. The seller determines the asking price - don't blame the Realtor. And, never select a Realtor to sell your property, based on what asking price that Realtor is willing to put on the property.
There is a corollary here. Some Realtors charge less commission and some sellers want the Realtor that works for the least commission. Real Estate sales and marketing is extremely competitive and exceedinly expensive. The best service costs more money not less and the best service takes the best agent. The best agents don't have to work for reduced commissions. You get what you pay for there too.
Copyright 2001-2005 by www.JodyHudson.com
Jody Hudson has been a Realtor in America and Delaware, near Rehoboth Beach, for 35 years.
The source page for this article is: http://www.kate-jody.com/essays/listyourproperty.html