A few months ago, I spoke with a seller who wanted to sell their home and who was interested in my guaranteed sale program.  It had been listed two times previously with other agents and the end result was a house that still hadn’t sold.  While the house was in an upscale surrounding town in the greater Nashua NH area, the difference between what it was last listed for and what the market would accept was just too wide.  Perhaps a previous agent just wanted a listing and came up with an overinflated price to make the seller feel good and get a listing, I don’t know, but somehow the seller had a price that was way above market.   

So, when meeting with a seller who has been previously given bad advice, and twice at that, an agent like myself is faced with a choice.  Do you tell them the truth, that the price is just unrealistic and give them an honest assessment of what they could expect from a sale and what can be done to get as high a realistic price as possible?  Or do you think to yourself, “Well, we’ll just list it at what they want and see if they change their mind as we go along”. 

Well, I decided to take the high road and explain a price that was realistic and showed the seller other sold comparable properties that were similar to their home to explain why the expected sales price would be different.  Some of the sold homes were superior in what they offered, others were inferior.  Looking at the superior and inferior sets of homes would give us a range to figure out where their home would most likely be accepted by the market. 

Of course, when you explain to a seller that the market won’t provide the thousands of dollars that the seller wanted, frequently they have to think about the whole situation, especially if they made plans based on the old price expectation. 

Lo and behold, a few days after meeting with them I noticed a brand new listing on the greater Nashua NH real estate market, or so it seemed.  Funny enough, the price was actually higher on the  new listing sheet than when it was last listed and it didn’t sell. 

At last check the house was still languishing on the market, months after we had initially met. 

From a seller’s perspective this scenario can definitely be confusing.  If they are talking to different Nashua NH real estate agents and getting vastly different pricing numbers, who should they believe?  On one hand, they could be dealing with an agent who is just trying to make a quick buck by turning the house quickly and sacrificing equity.  On the other hand, they could be dealing with an agent who just wants to tell the seller what the seller wants to hear in the hopes that the seller will sign on with them. 

When pricing a home the first thing a seller should do is look at what other properties have sold for that are similar to their home.  If a seller has an agent just tell them a price without any supporting information as to WHY the house should be priced a particular way the seller should seriously consider not hiring that agent.  Secondly, a seller should take a good look at the types of marketing that the Nashua NH real estate agent is going to do.  If all they are going to do is throw the listing in MLS and wait for a buyer to come along and have a very passive approach to finding a buyer, that is another big red flag.  Third, do you get a sense of honesty when speaking with them?  Also, does the agent offer any performance guarantees?

While it may feel good for a seller to list a home for what they need, as opposed to what the market will accept, if you are in a descending market you can actually lose more money in the long run than if you just priced the home correctly from the beginning.  When a seller overprices their home they do a couple things, all bad:

1) Help your competition sell their home.  Frequently when buyers are valuing a home, they will look at other properties and what they are listed for. If they see your home and another similar one but yours is tens of thousands higher, that gives the buyer more justification to not buy your house and instead pursue a different one that they feel offers a better value.  This has happened over and over, especially with all the foreclosure properties that have come onto the greater Nashua NH real estate market.

2) If you are in a descending section of a market, you actually chase the market down.  There have been several sellers who fit into this category over the past 1 – 2 years.  While you could get away with pricing your home at the top end of the comparable range when in an ascending market, if your home is in a descending market then the market drifts down, making your home even more overpriced as time goes on as the market falls further.  In order to get homes sold now you need to look at the range and price it in the middle to the bottom end of the range so that when a buyer looks at your home they say “Wow, that is a great deal on that house”. 

3) If your home is vacant, you prolong carrying the mortgage and paying the utilities on an empty house.  After a couple months on the market those bills can really add up.

Bottom line analysis:  If you are a seller, don’t shoot the messenger for bringing you an honest answer.  It may sound counterintuitive, but sometimes the agent quoting you the highest price really will end up costing you in the long run. 

If you want an honest analysis of what your home might sell for, check out our free over the net home evaluation today.

Andy Benjamin
REMAX Properties I
603-674-5864 (cell – best way to reach)

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