Tuesday, July 31, 2007

Your Home's Value...

I woke up at 4am this morning, and could not fall back asleep. It is now about 5:30am, and I figured since I am the 'agent on duty' this morning at the office and have to get up soon anyway that I would just start my day a bit early.

I am sure ya'll can relate to the fact that your mind tends to skip around from one thought to another when you are laying in bed not able to sleep...

One of the more prominent re-ocurring thoughts I had on my mind this morning was the fact that I was not selected by a seller this last week to list a property. I "lost" to another agent. I always ask for feedback from clients, potential clients, etc...the feedback I received was that they chose some other agent who had suggested a substantially higher listing price. The property in question showed up on the MLS today, listed at $439k. I had suggested $399k.

Folks...recent comparable (like-kind) property sales data just does not lie.

Case in point...this example is from earlier this year. I met a lady from out of state who inherited a house in a very desirable neighborhood in Carmichael. The house had been owned by an elderly couple for 50 or so years, and was in need of (among other things) a new roof, paint, flooring, new siding, landscaping, and lots of cosmetic updating. I did a very comprehensive analysis of the home's value, and determined the home should be listed at $559k in its current condition. The day I was going to meet the lady to sign the listing agreement, I received a phone call from her saying she decided to list with another agent who told her the home was worth more. Naturally I was taken aback...sure enough, the next day the home appeared on the MLS listed at $650k. WOW! About 30 days later, they did a price reduction to $625k. Another 15 days later, they did a price reduction to $599k. About 30 days after that, it went into escrow with a buyer. When it closed escrow just recently, it sold for $550k. Hmm...

Overpricing a home has a negative impact on a listing. Your home will sit on the market too long. It invites low-ball offers. You end up doing price reductions and "chase the market downward." You will eventually fetch a price much less than if you had priced the property correctly to begin with.

I dare say that "case" would have sold immediately if it had been priced at $559k, netting the seller more money and saving valuable time.

How ever you choose your agent, please do not make your selection based on the agent with the highest suggested listing price.

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