Selling Soulfully with Jennifer Allan

Sellers want more for their homes than the market is likely to pay. That's a fact; it's been a fact forever, during boom times and busts, and will continue to be a fact long after the Recession of 2009 is behind us.

Nothing wrong with it; it's human nature and we're all guilty of putting a higher value on our own precious stuff than anyone else is going to. But part of our job as listing agents is to gently persuade our seller clients that we need to price properly in order to get their home sold.

But should that "proper price" take in to account what the house might appraise for?

In my opinion, no.

WHAT???? Jennifer, are you out of your mind?? What if you overprice the house and it sells at that price and the appraisal comes in low?? What then?

Indeed.

I take great care in pricing my listings - I want to get my seller the highest possible price in the shortest amount of time, assuming that's his goal, too. And I've been doing this long enough to understand that pricing it RIGHT is best way to get the highest price, as opposed to pricing it high and hoping a bigger idiot comes along and pays that price. So, before I continue, let me assure you that I know how to price a house to sell quickly, without giving away my seller's money. (Read more about that here).

If I feel a house will sell for more than the market data indicates, I'll not hesitate to price it accordingly. If a particular house shows so well and feels so good that it blows away the similar competition and recent sales... even if "on paper" it's not "worth" more, I'll put that higher price on it. My seller deserves the opportunity to see her hard work or design-sense or whatever pay off for her.

(Again, remember, I'm not stupid and I'm not inexperienced. I know what I'm doing.)

So, back to the original question. "What if it sells at full price and then doesn't appraise?"

Frankly, I'll deal with that when and if the problem arises. If I get my seller "too much money" for his house, and the appraiser or underwriter doesn't agree with me and the buyer, then we'll go to Plan B. Which, yes, may include the seller coming down on his price to meet the appraisal. Or getting a second appraisal. Or whatever other solutions we can come up with.

And yeah, it might suck and everyone might get mad. But I'll deal with that at the time!

I'd much rather take the chance of getting top dollar for my seller and then scrambling to justify it, then to pro-actively risk leaving my seller's money on the table when we could have gotten more. In other words, I don't believe in underpricing a home in order to avoid appraisal issues, and I don't believe it's a good tactic to use when discussing price with a seller prospect.

How do you feel about it?

www.SellwithSoul.com

This is yet another follow-up to the topic of "Is Price Always the Best Answer to a Non-Selling Listing?" that I started last week. You can read more HERE and HERE.

Real estate agents are quite fond of the philosophy that "Price conquers all," meaning that if you price a listing low enough, it will sell regardless of the challenges the property presents.

Fair enough.

But I must ask. So what? Is that our job as professional real estate agents to simply recommend a price low enough that any piece of junk will sell?

Or, rather, is it to help our sellers get the highest possible price in the shortest possible time, whatever a realistic price and time may be? If our job is to simply sell it fast, at any price, well, shoot, just about any idiot can give their property away! Isn't that why homesellers hire us in the first place, to do a better job for them than they can do for themselves?

Real estate agents are always bragging about their listing expertise and defending their commissions by claiming they MORE THAN EARN THEIR FEE. Uh, well, I have to disagree if the only solution we offer our sellers is to price aggressively. There ARE other things a seller can do to maximize his sales price, and it's our job to 1) know what those things are, and 2) be willing to share those secrets with a seller and 3) help the seller accomplish those things. (and those were the topics of the previous blogs linked to above)

What if you went to your doctor with a pain in your leg and the only solution he offered was to cut the offending appendage off? Yes, that would cure the pain in your leg, but maybe there's a better way that involves a little more effort on his part (and yours). Or if your plumber simply removed the toilet that wasn't flushing instead of figuring out how to repair it?

Of course, if I request that the doctor amputate my leg, or that the plumber tear out my toilet, or that my Realtor simply give my house away, well, then, they have my blessing. But in most cases, c'mon, our clients deserve a little more effort and expertise than that, don't they?

I'm not sayin' that price isn't important - of course it is. But if we keep preaching that "Price is the ANSWER!" to the exclusion of any other effort on our part, we may end up preaching ourselves out of a job...deservedly so, I might add.

Picking up from Wednesday's "If Your Listing Isn't Selling..."

So, if your listing isn't selling and you've agreed with me that perhaps price might not be the best solution, what else can you look at?

Well, it might be really simple. Have you checked access lately? Lockbox still there? Key still in it? Key still work in the lock (sticky locks kill showings)? Is the seller declining or restricting showings?

Have you previewed your listing lately? Does it still show well and smell good?

How's your MLS description? Is it dull ("3 bedroom/2 bath ranch in Woodbridge") or jazzy ("Mid-Century tri-level with modern flair!")? Do you over-promise and under-deliver? Are the photos in season? ARE there photos? Are the driving directions correct, if the property isn't a slam-dunk to find?

Here's a biggie - IS THERE A BUYER for this house? Are other similar homes selling? If so, there's something wrong with yours. If not, there may simply not be a buyer on the planet at this time and you can't manufacture one. Not all homes are sellable, contrary to popular opinion.

Take a really close look at what IS selling in the neighborhood or market area. Can you identify any common denominators among the selling listings versus the non-selling ones? Maybe all the sales are of 4-bedrooms and yours has 3. Maybe it's the 2-story models that are selling and yours is a ranch. You can't fix that, of course, but it might help you understand (and explain to your seller).

But what if the problem isn't simple, but is fixable?

Tell ya what - if you want to hear the rest of the story - click here for a 15-minute audio from a live presentation I did this spring on this very topic! Hope you enjoy!

This stuff is also included in my released-just-this-week book "If You're Not Having Fun Selling Real Estate, You're Not Doing it Right!" available as an ebook at my website.

excerpted from my new book "If You're Not Having Fun Selling Real Estate, You're Not Doing it Right!"

When your listing hasn't sold, what's the first thing you look at? 

PRICE!

Right?

Nope. Not always. Not even most of the time.*

Many real estate agents claim that price cures all. And in a way, they're right. If you have a listing that shows poorly or is difficult to show or smells funny, there probably IS a price that will inspire buyers to overlook the clutter, access issues or eau du Chef Boyardee.

But is price the RIGHT answer? Again, not always. Not even most of the time.*

Why on earth not?

Three reasons.

First, I hope that when we real estate agents price our listings, we're pretty proud of that price. If I've put a price on a property, unless the market has declined, I'm pretty sure I'm in the ballpark. And the thing is, in today's market, buyers are well aware that they can "make an offer," so a minimal price reduction--say, $229,000 to $224,000 probably isn't going to make much of an impression on the market. In order for a price reduction to be meaningful, it's going to have to take that listing into a different pricing tier, thus introducing it to a whole new set of buyers who weren't looking at it before. And, depending on the price range of the property, that might mean a price reduction of $20,000 or more.

Now, think about what we could do with that $20,000--seriously.

Second, automatically resorting to the solution of reducing the price is really not what my seller wants to hear, and in that mindset, he's likely to question my professionalism and commitment. Let's face it, a price reduction is an awfully easy solution to offer and often abused by the real estate community. We all know agents who "buy" listings at a too-high price and then, as part of their game plan, beat up the seller later for a price reduction. And this isn't a secret to the general public--a lot of sellers are aware this happens, too. So, when your first and only solution is a price reduction, I believe it can really damage your credibility, especially if you recommended or agreed to the price in the first place.

But the main reason I'm opposed to looking first at the price as the solution is because it's rarely the best solution for the seller.

The thing is, there are tons of solvable problems - some simple, some not-so - that can keep an otherwise marketable home from moving. Our job is to play detective with our non-selling listings to determine if there's a problem we and/or our seller can solve, outside of a price reduction.

Stay tuned... I'll pick this up tomorrow!

*Unless you're overpriced to begin with, of course.

www.SellwithSoul.com