Wonder why Realtors want to list your home at a lower price than you do? If you've ever interviewed a Realtor to list your home, you no doubt have experienced in opinion of how much to list the home. Homeowners always want to list for the higher "zestimate" amount or just under the highest priced listing in their subdivision. Realtors seem to always have numbers much lower, no matter what figures you've seen in your research.
Plain and simple, we want to cause a stampede of buyers running to your home. We want multiple offers and an all out bidding war for the sale of your house. We also want to close the deal fast, because the longer you wait for a sale; the more unhappy you are with your Realtor. In the listing presentation, we give you logical reasons why overpricing hurts your chances of selling:
1). buyers look at lower-priced homes first
2).Buyers express displeasure with their agents when they are shown homes that they feel are not good deals
3.) Buyers believe you must be unreasonable if you priced too high, so they don't want to negotiate on your house.
But as the Homeowner, you still believe that your home is worth more than the other homes in your neighborhood. You remember your neighbor's kitchen in the house that sold last month, and so you know your home is worth a lot more than what theirs sold for 4 weeks ago. You know that when Buyers see your home they will make an offer and it will be based on the higher list price, so you'll be negotiating from a higher starting point. But let's look at the reasons why your Realtor thinks a lower or more reasonable list price benefits your bottom line.
REASON 1: The more Buyers you have looking at your home, the more likely one of them will want to buy it. When Buyers are selecting the homes they want their agent to show them, they narrow their choices by PRICE and PICTURES. An average showing appointment includes viewing 3-4 homes. During that first appointment, Buyers are seeing the BEST deals the market has to offer that day. They are seeing what their mortgage can buy. They are comparing what kitchens they can buy with their mortgage. They are asking themselves and their Realtor: "what's the best price and quality can I get in this area". They don't choose the least expensive. They choose the BEST QUALITY FOR THE PRICE. Your kitchen may be a 10 on the buyer's scale, but if they can get a 9 for $10,000 less, which do you think they choose?
REASON 2: Buyer's are at all costs trying to avoid paying too much. Buyers have been listening to the advice of friends and family and of course watching real estate shows on TV. They have been looking at homes for months before they are ready to buy. They have been visiting open houses in more expensive neighborhoods, just out of curiosity. They have been gauging the market on homes for 12 months or more. They have seen homes list and sell and have taken notes. Today's home buyers know more about the market than some real estate agents. And these savvy Buyers will not pay above the median price per square foot and amenities. They've seen a dozen updated this and remodeled that. They are not easily impressed and certainly not willing to buy at prices that don't justify THEIR BOTTOM LINE.
REASON 3: The higher the price, the longer the days on market. No one wants to buy the house that's been on the market for months and months. They think that there must be something wrong with the house or with the sellers' motivation that the home hasn't sold. When the inevitable "price adjustments" happen, Buyers sense desperation. They then make lower offers than they would have otherwise. At that point, the homeowner feels that the agent is at fault that it has taken so long to sell and that the agent must not being doing a good job of negotiating. No listing agent wants a Seller to be this angry.
So when the listing agent gives you list price suggestions that are lower than you'd like, know that it's to benefit your bottom line and just consider their advice. If you still feel you need to list for a higher price, ask what you need to do to get Buyers to pay that higher price. And then, DO IT.