The Facts of (Real Estate) Life
OF (REAL ESTATE) LIFE (For Home Sellers) - Joseph P Klock
Your house cannot sell for a penny more than
the BEST OFFER OBTAINABLE from the BEST BUYER AVAILABLE in the
Recent sales of similar properties have historical
value, but the best buyer we are looking for is
to be found in the present market place, not in the past record
books. Our job is to find that buyer and obtain his or her highest
possible offer. No house in history has ever sold for more than
the best offer obtainable from the best buyer available in the
The only way to determine the true value of
a house is to thoroughly TEST THE MARKET and aggressively CHALLENGE
Appraisals and expert opinions can be helpful
in establishing a listing price for your home, but its ultimate
selling price will be determined by the prospective buyers whom
we are able to contact. Buyers will compare your home with other
offerings in their price range and make judgements. It is critical
that your home be competitive in price and appeal with the other
options that these prospective buyers will be considering.
Testing a BIGGER MARKET and a BETTER MARKET
with GREATER SKILL yields a better price.
It is axiomatic that the larger the market you
can reach and the higher the quality of that market, the better
the price you will realise. It stands to reason, for example,
that sellers working alone can expose their home only to the
small segment of the market that can be reached by a single
sign and limited advertising. It is also important to note that,
in spite of the multiple signs and substantial sums of money
spent on advertising, these two sources typically account for
only about 30% of the actual buyers attracted to a typical real
estate office. The other 70% of the market is represented by
the marketing activities of your Real Estate team.
It is also well-established that the buyers most
ready, willing and able to act are almost invariably availing
themselves of the services of real estate professionals.
Finally, the best buyer, unless he or she is being
handled by a skilled professional, can often come and go without
making a commitment.
An appropriate listing price will, immediately
and consistently, ATTRACT ATTENTION and GENERATE ACTIVITY.
The process of TESTING THE MARKET need not be
a lengthy one, regardless of marketing conditions. As previously
stated, buyers do comparison shopping and act accordingly. When
a property is first exposed to the market, both buyers and salespeople
make instant evaluations of the offering and, if
it compares favourably with what they have already seen, it
will not only attract their attention, but stimulate them to
inquire for details and arrange appointments to inspect.
Your listing price must be realistic enough to
immediately attract this attention from buyers and salespeople.
If it does not do so, while competitive properties are attracting
attention and generating activity, you have a clear indication
that your listing price is not meeting the acid test of the
market place, regardless of economic conditions or other external
A home that is PRICED REALISTICALLY and MARKETED
EFFECTIVELY will always sell!
Theres an old saying that the three most
important works in real estate are location, location
and location. Like a lot of old sayings, it is simply
untrue. No matter how poor the location might be, there is a
price at which it will sell, and that price will be determined
by testing the market.
The three most important words in real estate,
therefore, are PRICE, EXPERTISE and MARKETING.
Unless the price is competitive, the chances of
a home selling are slim to none; and even realistic pricing
should be supported by the thorough testing of the market and
aggressive challenging of the competition that can best be performed
only by skilled professionals.
BOTTOM LINE #1: When realistic pricing
is combined with effective marketing, there is a buyer for everything
and, given these conditions, any home can be sold in any market.
BOTTOM LINE #2: Homes that languish unsold
on the market for months and even years are ignoring these facts
of real estate life, often causing unnecessary inconvenience
and financial damage to their owners and agents.
The market is not always
kind, but it is never wrong... and those who believe otherwise
pay a heavy price for ignoring these facts of real estate
Visit Joe Klock at: http://www.joeklock.com/
- ADVICE FROM AN AMERICAN EXPERT
The following article appears on the Web Site
of Jay Burnham of Massachusetts USA. Visit Jay at http://www.northshorerealestate.com
and check out his other articles for sellers.
Sellers often wonder why buyers don't make offers.
Some sellers find it hard to believe that the source of the
problem is that their list price is too high. Buyers can make
lower offers, right? They can, but in most cases serious buyers
don't make offers on homes that are priced too high for the
It's easy to understand why buyers don't offer
on overpriced listings when the market is glutted with inventory.
With plenty of homes to choose from, why would a buyer waste
time making an offer on a property that's listed above the competition?
In low-inventory markets, however, the reasons
why overpriced listings don't sell is more complex. Buying and
selling homes is an emotional experience. Psychological factors
come into play. Some buyers shy away from making a low offer
on a listing because they don't want to offend the seller. This
is particularly so if the buyers have a serious interest in
the property. In this case, they often prefer to wait for a
price reduction before making an offer.
Sellers often think that if buyers love their
home enough, they'll pay more for it. This is true to a point.
But few buyers, if any, are willing to pay more than the fair
market price. A home is worth what the market will bear. It's
not necessarily worth what the sellers want. Buyers usually
know market value better than sellers do. Sellers may look at
a few houses before listing theirs for sale. But buyers frequently
look at as many as 25 or more homes by the time they decide
to make an offer on one. So it's difficult, if not impossible,
to convince today's cost-conscious, consumer-savvy buyers to
pay more than market value for a home.
Sellers who put an unrealistic price on their
home send a message to real estate agents and prospective buyers:
here's an unrealistic seller who may be difficult to work with.
Most home buyers today are busy and don't have time to waste
with unreasonable sellers. This is why most buyers would rather
wait for a price reduction before starting to negotiate.
HERE'S A TIP: Sellers who discover they're
priced too high should reduce their price as soon as possible.
A home is most marketable when it's new on the market. If it
doesn't sell within the first month or so because the price
is too high, agents and their buyers lose interest.
Sellers may be reluctant to drop their asking
price when the property is new on the market. But keeping your
home on the market at an unrealistic price could result in a
lower selling price when it ultimately does sell. If you lower
the price when the listing is relatively new, you have a chance
at keeping the marketing momentum going.
New listings stay fresh in agents minds
for the first few weeks they're on the market. This is why lowering
the price on an overpriced listing early in the marketing campaign,
while the property is still fresh in the agents' minds, makes
sense. After a listing has been around for a few months, a price
reduction won't have the same impact because many agents will
have forgotten about the property.
IN CONCLUSION: Not only do buyers not like
to offer on overpriced listings, agents don't like to show them.
Put yourself in the agent's shoes. If you're working with buyers
who only want to see well-priced listings that suit their needs,
wouldn't you risk losing credibility if you took them to see
properties that were overpriced?