Why the Price?
What are some things I should consider when thinking of Buying or Selling a Home?
Selling a home is not the easiest task right now, even though it is traditionally the right time of year to sell. In St. Louis, there are hundreds of homes across the entire metro St. Louis area that expire without selling or even receiving an offer. Adding to the stress for sellers are the multiple price reductions that a Real Estate Agent seems to inevitably ask for. Sellers should look at why they are selecting their agent and why they are selecting their price.
Why pick a particular Agent?
Many people, buyer's and sellers alike, will pick a real estate agent off of a referral from a friend or relative without even looking around or interviewing any other agents. If they don't have a referral, many will just pick an agent who seems to have a lot of advertising. This lack of research into a Realtors experience can result in a buyer or seller not getting the best service. One reason for this is the public perception that Real Estate Agents are all very similar. This is very far from the truth, in that most licensed real estate agents do not have the necessary skills or experience to effectively market, negotiate and smoothly bring to close your purchase or sale. In fact, anyone with time for a few weeks of classes can obtain a license and claim to be an expert Realtor. The reality is that buying and selling real estate is a complicated activity and unless you have handled lots of transactions, bought and sold lots of property and/or renovated or managed many real estate investments, there are too many variables and possible hazardous scenarios for a seller or buyer to trust a novice agent.
Having bought and sold a couple homes in one's lifetime or helped a couple clients is not enough experience. It is important to have conversations with your Realtor. Selecting a Real Estate Agent is like selecting any other financial professional, in that you want them to know everything about their profession, to offer good service for the price and to have a good rapport while you are working together. Many Agents have their image together and their rapport with their clients but lack the necessary experience to help their client get those extras that only an experienced Realtor can. By having several conversations and asking many questions, a Seller or Buyer can accurately tell if their Agent is going to be the right choice.
Why did my Agent recommend a certain Price?
Realtors use data to reel in potential clients. A Seller can speak with several agents and even appraisers and get several different potential prices for their home. This happens from the abundance of data available, in addition to the motives of the Real Estate Agent. By promising a higher price, an agent can lock up the listing contract while making the Seller very happy that they found the agent that will get them this price. The truth is that an Agent does not get a price. In fact there are many variables that will determine the actual price of the home. Some of these variables include the time of year for the sale, the neighborhood, the condition of the home inside and out, the layout and size, additional or special features of the home, the economy, how many foreclosures are around, how many renovations are around plus many more. In action, the Real Estate agent that promised a high price many times will come back in a month or two for a price reduction. At that point, the seller is already locked up into contract and faced with reasons the old price was incorrect, which of course is never the agent mis-pricing.
This is not to say that a seller shouldn't be faced with price reductions, or that an agent is not allowed to ask for them. Sellers should simply be very aware of both the data used and the actual features, location, neighborhood, etc. for their particular home. Like I mentioned before, the data was probably there to justify the higher price. Seller's like to hear their home is worth more. If an agent tells them he can get a higher than correct price, it is easy for a Seller to get excited. A true professional will educate the Seller about potential quirks or issues regarding their home. The professional will not promise a price for the sake of the listing, instead opting to accurately illustrate the positive and negative features of the the home/area/etc to accurately price the property. This may not be exactly what the Seller wants to hear at first, but it will result in a quicker sale at a price the other agent would have gotten the seller to reduce to anyway. Plus it saves lots of headaches and stress for a Seller to know they have chosen the right price and the right Realtor. And by having several conversations with your Realtor, you will have plenty of time to know that they are the right choice.
Reconnect Realty offers Sellers and Buyers in St. Louis and St. Louis County Professional Services at an affordable price.
