We met with a potential seller a few months ago about selling his property. He reached out us because his son lived in a neighborhood nearby and suggested he call us because we had recently sold a home for a record price in their neighborhood. When I spoke with the seller on the phone, he mentioned that he was going to be interviewing several other agents and I assured him that was the right course of action to take. One of the agents was a very successful agent from the area and the other was an agent we were not familiar with. When we met with the seller and his wife, we gave him a thorough explanation of our approach to the entire home selling process, showed him our comprehensive marketing strategy and a provided a detailed analysis of the comps and our pricing strategy.
After our meeting, he mentioned that he was going to be meeting with one other agent that day and that he would be making his decision that evening. When we spoke with him later, he informed us that he was going to be working with the agent that we were not familiar with. When I asked the seller “Why” he told me that the ‘other’ agent suggested the highest listing price.
It really got me to thinking about the criteria that sellers use to evaluate agents and the strategies that agents use to ‘win’ listings. It is important to understand that the strategy invoked by this particular agent to ‘get the listing’ was not of any benefit to the seller, and did, in fact, cost him money at the close of escrow.
No seller wants to leave money on the table, but a higher listing price does not always mean a higher sale price. Properties that are overpriced sit on the market longer and typically end up selling for less money. Picking a listing price for a property needs to be a strategic decision and one that factors into the marketing plan for the property. It is not just a number that you pick out of ‘thin air’. When we sit down with clients we go over several pricing strategies with them and detail the pros and cons of each approach. Ultimately we feel that it is the seller’s decision to pick the final listing price of the home based on the information and market analysis that we provide.
Unless an agent can tell you WHY and HOW they are going to get that price, they may be just telling you what you want to hear in an attempt to list your home. My wife and I have many examples of achieving ‘top of market’ results, but not without a careful, methodical, well-executed approach and understanding of the local buyer market. In this particular example, the property ended up closing for $125,000 less than their original asking price, went through several price reductions and was on the market for over 100 days. It also ended up selling for substantially less than what we told the client we would be able to get for their home.