Whatshot
Property Talk
Property Talk
Date: 2017-09-28
Seven bogus pricing myths sellers shouldn't fall far is the title of a recently published article by US realtor Cara Ameer. The real estate agent has to carefully advise their client, the seller, on realistic market related pricing. Regardless of what a seller may think their home is worth, the market will eventually discipline the seller in either delivering a sale at what the market will bear or ensuring that the home simply does not trade if it is priced to stay rather than sell. The seven myths that are cited as often getting in the way of a sale are:
1. It is better to price the home on the high side because the seller can always come down. If buyers are interested, they can make an offer.
As with most myths there is always some element of truth. Yes, buyers will always make offers and yes it can be harder to go up rather than down, but not impossible, but it is a matter of degree. If a home is over-priced the risk to the seller is that qualified prospective buyers will be lost and the home will be used to sell a competing home offering relative value.
2. If a home is priced just right, a seller risks leaving money on the table.
This is false. A well priced home immediately generates a lot of interest amongst serious and well-qualified buyers. This sense of urgency is the ideal environment for the seller to transact in and if the appointed agent can come away with more than one offer the seller may even have buyers competing for his home.
3. The price should escalate over time. If it does not sell now, it can be relisted in a year or so at a higher price.
This nonsense is believed by more than a few sellers. The longer a home is on the market, the more likely buyers will question its value. Dated interiors and appliances and evidence of a lack of maintenance are price killers and lead to lower eventual pricing not higher.
4. Setting a bottom line price.
Sellers may often state that they want Rx in their pocket or that they will not consider offers below a certain threshold. Regardless of what a seller may want, the market dictates pricing. The old adage, "Your first offer is your best offer" is often true.
5. An offer should come in close to the asking price.
This is seldom the case and buyers may feel bold and aggressive in a market favouring buyers. Sellers should always consider each offer on its merits and be prepared to counter-sign and negotiate on pricing. If no meeting of the minds can take place then politely declining the offer will leave the door open for a future opportunity.
6. Oudated features shouldn't impact the selling price.
Reality check! Buyers want current finishes and modern fixtures & fittings. Pricing will be adjusted downwards to budget for things like new bathrooms, kitchens, floor coverings etc.
7. The buyers offer is too far off the asking price to negotiate and counter.
For a buyer to get to a point of reducing an offer to writing and presenting this for consideration with firm terms of performance, a clear level of intent is communicated. The seller should take full advantage of this and explore all avenues in making a transaction work before closing the door.