Jim Valentine on Real Estate
Buyers and sellers have one thing in common. They are both concerned about the price of the property. Buyers prefer the lowest price possible while sellers are seeking the opposite, the maximum price possible.
With such diverse goals it may seem impossible to have them agree, but in most cases their differences are managed through other factors and the price is happily agreed on by both parties.
It is important, however, to have a starting point that is attractive to the other side. The first to reveal a price in most situations is the seller when they list the property with an agent for sale. Their process for determining a list price can vary.
Most sellers know in their heart what their home might sell for if they’ve paid any attention to their local market, but there is always the hope that they may be surprised by a higher suggested price by the agent.
Agents are always asked, “What price would you recommend?” That is a loaded question that can take many directions. Some agents will pop off a high price in order to get the listing and then work the seller down in price week after week.
As old as this deceiving practice is, it continues to this day. Other agents will work to price the property low to crank out a quick sale. This is just as onerous. A good agent will help the seller get a good perspective of the market and how they fit into it with their specific wants and needs.
While appraisers look back six months to get the sales information of comparable properties that have sold, the agent must look back and forward. Where might the market go and when. Agents have no crystal ball to guide them, but an active agent is aware of market trends.
The seller’s situation will play a big part in their pricing strategy. Do they have to move right away for a reason beyond their control, or can they test the market? Is the property unique, perhaps too esoteric for most of the market?
That will not only affect marketing time, but price as well. Depending on the property, the price could go up or down from the comps.
When introducing a home to the market there is always the thought of starting high, “We can always come down!” being the standard refrain.
This practice can backfire as you don’t know about the quality buyers that may pass on your home while you are testing the market. Ideally, you’ll get offers that drive the price up, but, while that happens, it isn’t always a good idea.
Many quality buyers don’t want to get in a bidding war. Buyers have many of these same thoughts only in reverse. Make a low offer, “They can counter, and we can always come up!” You can’t go up if your low offer softens the seller to a point where they accept another offer.
Buyers often overthink their position and play their hand for their audience rather than securing the property. The audience? Friends, family, co-workers — people that they can share their success story with.
The same ones they play the victim for when things don’t go well. Value is what a willing buyer will pay, and a willing seller will sell for providing neither has extenuating circumstances affecting their decision.
There is no absolute black and white way to price a home, but you can get very close with your professional agent and can fine tune value by working with the time frames and conditions in the offer. The offer in its entirety will shape value.
Be clear on your wants and needs and the path to ownership will appear. It isn’t always about price though; price is always a factor. Make the right “deal” for you and your family and you’ve done well.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, License No. BS-03481, RE/MAX Gold Carson Valley 775-781-3704. dpwtigers@hotmail.com.