My esteemed managing broker, Gretchen Faber (who was interviewed by Charles Gibson on World News Tonight last night), found this interesting article in the New York Times written by a disgruntled seller/journalist claiming to have lost thousands of dollars based on the price he’d have to sell his house to actually get it sold. It’s pretty entertaining because there is a letter to the author written by a Denver Realtor (he’s pretty blunt, which I like) in response to the article. Check it out here.
The timing of this article complements my post from a few days ago about how to sell your home from a position of power.
Failure to Communicate!
I think what we have here is a failure to communicate realistic expectations. When a Realtor says “You can list your house for $425,000 even though homes are selling for $400,000 because you want that negotiating room to get to $400,000 eventually…”, correct me if I’m wrong, but as a seller, what you hear is, “You can list your house for $425,000 blah blah blah blah blah blah…”
The problem with this scenario is that with buyers becoming emboldened with free information, they aren’t going to pay a dime more than a house is worth. Which means that a Realtor instructing you to list your home for $425,000 means that you’re simply going to allow buyers to come and go without making an offer because there are more viable candidates in other parts of town that aren’t 5-6% overpriced.
Good Result/Bad Result
Example: Two listings of mine: one sold in 5 days; one had to be cut loose. The first one was listed in line with sold comps in its neighborhood (Stapleton) and we got 99% of list price. The second was listed with general neighborhood appreciation in mind (house was owned for 5 years… Park Hill between 16th and 17th). We got a lot of showings, but when no offers came in, I discovered that after we listed the home, competing listings in the neighborhood were being put on the market and scooped up in droves at a price point about $30-40k LESS for essentially the same dimensions. Unfortunately, that put my seller right at where they paid for the house. Did they overpay for the house 5 yrs ago? Maybe. But the point of Gretchen’s post (and Bill Dolan’s comments) is that what happened 5 yrs ago doesn’t matter. It’s playing the cards in front of you today. The financial decision is hard for people whose assets (or liabilities) are tied to a house, but their ultimate decision was to save money by selling it themselves as opposed to cutting losses and learning from a tough experience.
Does that sound callous? Granted, if I sold them the house 5 yrs ago, I’d certainly be trying to justify their purchase price at the time, but even then, they went through the same due process everyone else goes through. I can’t expect everyone to take responsibility for their own actions, but at the very least I can paint a realistic picture of what you can expect.
Find out more about how I’m pricing my listings.
[...] I alluded to in my “This Lovely Market” post, if you’re selling in this market, it’s likely you HAVE to sell, which means that [...]