Dear David,
Why would an agent allow a seller to overprice their home? – SEEMS ODD
DEAR SEEMS: Throughout the history of real estate and regardless of market conditions, there are always homes that hit the market with an inflated price tag. Whether it’s a buyer’s market, seller’s market or conditions are balanced, some sellers are always concerned that they may be “leaving money on the table”.
Real estate is subjective, which sometimes makes it difficult to arrive at the correct listing price. If two people were walking through a grocery store and filled their carts with the exact same items, they’d run up identical totals at the checkout. This can’t be said for real estate, since it’s virtually impossible to find two duplicate homes that are for sale at the same time.
Let’s say you and your best friend built identical houses at the same time, and they were located side-by-side on the same street. Even though they would look like twins from the outside, you would both end up choosing different finishes and upgrades. You might like a wide-open backyard, while your friend prefers a koi pond surrounded by rosebushes. You might install bold mosaic flooring in the foyer, while your friend opts for on-trend neutrals. If both of you listed your homes for sale at the same time, a buyer coming to see either one might have a different reaction, even though they cost the same to build and look identical on paper. That’s what makes home values subjective.
When it comes time to sell, a homeowner has usually been watching the market for a while before the sign goes up. They’ll recall the selling price of a neighbourhood home that is similar to theirs, but at the same time believe that their house is better. Choosng a price can be challenging if the seller’s expectations are higher than what the market can provide.
When Realtors gather around the water cooler to talk about what’s not selling, the common denominator is always price. A home listed for sale is like any other product. If you walked by a shoe store each day and saw a pair that you loved in the window for $500, there’s a good chance you’d keep walking. If those same shoes were on sale for $100, you might be compelled to go in and try them on. If a property doesn’t present good value to a buyer, it’s likely to sit on the shelf. That said, the seller has the final say when it comes to pricing their house. They’re not obliged to take their agent’s advice, even though that agent has their best interests in mind.
PRO TIP: Because real estate is subjective, determining the value of a home is not as simple as checking off boxes on a list. You’ll need to look at a property from multiple angles to establish value, and a home that presents a certain way on paper may not provide the same results in real life. Actual market values may be higher or lower, depending on its condition, presentation, and other factors. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.
