Sellers Don’t Always Like The Truth
It shouldn’t after all these years but it always surprises me how some sellers behave. Their condo has been sitting on the market for many months, unsold. They haven’t reduced the price. They haven’t done any work to make it show better. Instead, they believe that finding a different agent will get their condo sold.
Now, there is no question that a good agent is going to do a better job at marketing the property. (Think of all the MLS listings that have terrible photos or no photos as one small example or all the flyers around town filled with typos and terrible copywriting). A good agent will also know how to stage a property to make it as attractive to buyers as possible. Many times the problem is not the agent – the problem is the price. Good agents understand pricing and how crucial it is to a successful condo sale.
Here is a too-familiar scenario – a listing is about to or has just expired and we get the call from the seller who is “thinking about re-listing with someone else”. We look at the property, analyze the comps, and see what the prior agent did or failed to do to sell it. We meet with the seller, explain our marketing plan, give them staging advice, and then the conversation turns to price. It is often quite clear to us that the reason the property hasn’t sold is because it is overpriced. Yet, when we show the seller the market statistics and how their unit compares to the competition they turn a blind eye.
“I’m not going to give it away” is the usual refrain. I understand that many of these sellers bought at the height of the market and are losing money. The truth is – nobody cares what you paid. Buyers base their decision to buy on what is available in the market today and how your property compares to their other options. To sell a condo in Hoboken in today’s market your property must be compellingly priced. If a seller doesn’t understand that or won’t do that we don’t want that listing. We have a limited amount of time and would rather spend it productively. There are many agents out there today with no business. I assure you, one or more of them will say anything to a seller merely to get a listing. I have heard agents say “I’ll take the overpriced listing because eventually they will reduce the price.” Maybe that agent will get luck and eventually the seller will succumb to their pleas to reduce the price. Many times the listing simply expires yet again.
So what should the seller do to know if an agent is merely telling them what they want to hear? Ask the agent to show you hard numbers.
- What is the factual basis for the pricing recommendation?
- What properties sold in the past 3 to 6 months similar to yours? Active listings are meaningless. (This very issue will arise when your buyer needs an appraisal to get a loan).
If there are no comparable sales to support your price, the agent is perpetuating your fantasy. Today’s buyers are smart and armed with the facts. They get those facts from market analysis done on this very blog. If average price per square foot for March was $431, how do you justify asking $555 a square foot? There better be an awfully good reason. If you paid $700k in 2006 and have done no renovations to your condo, and the market is down at least 15%, why do you think you can list at $700k today?
Here is a dirty little secret – the real estate fairy is not going to come along and pay you what you want merely because you want it. If and when you do receive an offer from a buyer, you need to be able to support your asking price in order to negotiate successfully. If this is a bitter pill for you to swallow, don’t worry. There will always be a desperate agent out there who will tell you whatever you want to hear.