By John Stemlar, Sage Real Estate Advisors
Last summer, I interviewed to list a nice, albeit quirky north metro Atlanta home. The seller insisted that the home was worth about 25% more than the market indicated it was. In trying to “sell me” on an unrealistic value, he ignored the market data and effectively told me that if I couldn’t get on board with his price, he’d find an agent who could. I knew he would have no problem finding a willing agent.
The “winning” agent in this case simply acquiesced and listed the home at the seller-dictated price. Predictably, the over-priced home languished on the market for several months and, after multiple price reductions, it sold for less than 75% of its initial list price. This pricing disaster started with a head-strong seller; it was, however, fueled by an opportunistic agent willing to over-price the home in order to secure the listing.
Sellers tend to over-value their home; agents know this. They also understand the temptation to favor the agent that claims to be able to sell their home for a higher price than other agents. Sadly, there are plenty of agents willing to over price a home to get the listing; in real estate lingo, this is called “buying the listing.” An agent that buys a listing knows that he/she will be suggesting price reductions over the term of the listing contract until the price meets the market, the home sells and he/she is rewarded with a commission check. The over-sold seller-client always loses.
An agent’s job is to sell his/her client’s home in the shortest time at highest price. An agent’s listing strategy should reflect this objective. Implicit here is an ethical obligation to be honest with the seller, set realistic expectations and encourage pricing supported by market data. Beware; not all agents competing for a listing see things this way.
Pricing is the cornerstone of an effective listing strategy. As a seller, objectivity is critical; believe the relevant market data. Find an agent you trust and then trust your agent to do his/her job for you, including advising you on the optimal pricing of your home.
John Stemlar is a Principal and the Managing Broker at Sage Real Estate Advisors, a boutique Atlanta residential brokerage. He promotes the Lynwood Park neighborhood and the homes for sale in Lynwood Park at www.LynwoodParkHomes.com