I seem to write a lot about the programs on HGTV. Maybe because I am the ultimate HGTV addict and I eat, sleep and drink, all things Real Estate. HGTV is on at my house until they turn off their light and say “Good Night” to me. Yes, I am an official junkie and may need “intervention” myself. HGTV recently gave us a wonderful new show and has introduced to me my new hero… Mr. Mike Aubrey. I love this man. He’s to the point, no B.S. … a man after my own heart. Real Estate Intervention is a new series that focuses on overpriced real estate. His goal is to make the seller see that the market has changed and sometimes not in their favor.
Mike … please come to my area and hold classes on how to properly price a listing. These classes should not only be for home sellers, but their listing agents. The Class on Brass, see I even named the course for you.
Note to home seller: We as agents understand that you the home seller wants top dollar for your home. Who wouldn’t? But when a listing is OVERPRICED for current market conditions, the home sits. Any good buyer’s agent is going to explain to their client the home’s real value based on comparable recent sales before making any offer, if the home even gets shown at all. If you aren’t getting showings, you may have priced your home OUT of the market.
Today’s home buyers are not stupid, do not underestimate them. They have many tools available to them to that will help them understand today’s market, current comparable sales and property values and with the help of their agent can determine their offer, their “fair market value” offer.
I see it over and over, a home seller lists with the agent who told them what they wanted to hear. The agent gave them the highest list price of all the agents they interviewed only to have their home sit on the market much longer than it should have and usually they end up getting much less.
The newest obstacle I am coming across is the agent that does this, knows they overpriced the property and when an offer comes in, that is near asking price or at asking price, the agent says, “Oh, I don’t want to sell that high because I am afraid of appraisal issues.” …Huh? … What?!!?? Agents … please tell me I am not the only one who has heard this recently? Is it enough to make you want to …. oh nevermind, I won’t go there.
Believe it or not, I have come across this several times in the last month alone. Not only is this a disservice to their client, the seller, but very unfair to the buyer who looks at you to explain the listing agent’s tactics because they offered asking price (to maybe) get full seller’s assist (up to 6% of purchase price towards closing costs). Their offer is countered because it is “too high” … again … huh?
And so now the appraisal … it comes in too LOW. Now what do you do? Buyer doesn’t want to over pay for the home, would you? And the seller doesn’t want to reduce the price because the seller thinks their home is worth more. Both sides are understandable. Your options at this point are to renegotiate the price or the buyer must come up with the difference in cash between appraised value and sales price, if the lender agrees to give the buyer a loan for the overpriced property…. or the deal dies and everyone is unhappy. The buyer lost money for inspections and appraisals and the seller lost a qualified buyer and the home goes back on the market … overpriced and sits. And sits.
The moral of the story is whether you are a home-seller or a listing agent .. please do the market and yourself a favor … please list according to the current market conditions. Current market conditions determine the value of a property. Today’s appraisals are predominantly based on sales (closed, settled transactions) within the past 6 months. Because so many people today are upside down in their homes, because there are so many short sales and foreclosures, all of this takes its toll on property value.
It’s not something a home seller likes to hear, but thank you Mr. Aubrey for bringing it to the public! My hero!
Contact Kim Schreiner:
Kimberly Schreiner, ePRO, Realtor® PA License RS291767
RE/MAX Affiliates, NE
Kim’s Official Website
Cell 215-510-2149 Office 215-992-1726
Serving Philadelphia, Bucks and Montgomery Counties