So what, you say - well if your home isn't a lake home priced over $400,000 and it's been on the market for a while (over 60 days), without an accepted offer something is wronge- we are in a Sellers Market. It could be you are not correctly priced - how do you know if you are priced right? That's where your agent's skills and the CMA (competitive Market Analysis) come in to play. CMAs have to be accurate to be of any value - that means:
- Properties used in the CMA must have sold within the last 12 months
- Properties used in the CMA must be of similar structure and square footage
- Properties used in the CMA must be in the same area/town your home is located
*Incidentally this process is very close to what the bank's appraiser will use
What's that? Your agent didn't do a CMA to guide you as to where you should price your home, they asked you what you wanted to list at?
YOU ARE IN BIG TROUBLE unless you guessed really good, and chances are you didn't.
Let me share with you what will happen when I show your property to one of my buyers
- If my buyers are interested in making an offer on your property I will do a CMA to make sure your home is priced correctly for the market - I use all the criteria above. I do this because I am looking out for my client's best interests.
- If my CMA doesn't produce a listing range that includes your home price, I will call your agent and ask them for the comparative properties they used in their CMA to arrive at the price they listed the home at.
- If they say, "I didn't do a CMA, I just listed it where the sellers wanted to be or if they give me bogus properties (those that don't fit the proper criteria) I discuss that with my Buyers
- I recommed they do one of 2 things - first walk away because you (the seller/s) are not serious about selling or second we make an offer including the CMA I did to backup our reasoning.
- If I have a Buyer who loves your house and decides against the CMA results and recommendations to offer higher than the CMA results You may be in even bigger trouble trouble - if my Buyer needs financing (about 99.9% do) the bank will do an appraisal and use nearly the same criteria I used in my CMA.
- If the bank decides the house is not valued at what my Buyers offered, they won't make the loan - result - no sale.
Don't risk a no sale, or no offers on your home - you are paying a lot of money to be represented by a Brokerage, get your money's worth.
Personally, I won't take an overpriced home. Why - because basically the agreement you have with me is an employment contract, you are hiring me to do a job - sell your home. I can't perform on that contract if you insist on pricing it unrealistically. Even if I could sell it, there is a good chance the bank would not agree with the price and not loan on it and now there are 4 unhappy parties - you the Seller, me the listing agent, the Buyer and their agent.
It is really simple, I won't list a home too high just to get the listing and then later figure I can drop the price, to me that's an unethical practice. It is also an ethical practice to the National Association of Realtors.
Check out the NAR Code of Ethics and Standards of Prcatices
Take home - choose your Realtor very carefully, you are paying a lot because your agent has a lot of work to do. Let them do their job and insist that they do the research to help you position your home to sell.