In a comment I made on home stager Sharon Tara's post, The Secret To A Fast Home Sale: Two Words..., I shared an approach I use with people who have a home to sell within Sussex County NJ. Sharon encouraged me to do a post on it, as it might help others as well in discussing list prices with home sellers.
I commented: My phraseology is "The buyers are going to cast their votes. No showings means they have voted AGAINST your price. If you want your home to be elected instead of the competition..."
Even at my first meeting with someone who wishes to sell a home, I discuss general market conditions. Prices continue to decline in Sparta, Hamburg, Hardyston, Branchville - right down the list of all towns in Sussex - and are predicted to drop for the foreseeable future. While I will not have solid comps until our second meeting, I introduce them to my "democratic approach to list prices."
Basically, I let them know it is their right to set the price at which they will sell their home. A listing means they throw their hat in the ring and enter the race against all candidates - the other homes for sale. If they and I agree that I'll list their home, my job is to manage the campaign. Home buyers are the voters. We need to appeal to those voters.
Nothing earth shaking here, I admit. The real impact is when we're discussing the initial
list price and potential reductions down the line.
If we aren't getting potential buyers to look at a home, I remind the sellers that the buyers have voted. "Buyers clearly are telling us that they aren't interested in considering your home at its current price. Rightly or wrongly, the buyers do not perceive it as good value and they are looking elsewhere."
It does not always convince the homeowners to lower the price immediately, but they always begin to reevaluate their campaign platform...
Copyright © 2009, Irene Kennedy, all rights reserved. This blog post represents Irene's personal musings.
UPDATE Spring 2010 - Irene Kennedy has moved to Pohatcong and works from the Phillipsburg NJ Weichert office now. She is proudly bringing her experience and insight to those with homes for sale and potential buyers around Warren County NJ.
A nice way of putting it to the sellers and something they understand. You want to be in the running, you have to have something the buyers want, at a price they want to pay.
Good idea. I've been trying to come up with a new idea to get sellers to price their homes right. This idea will help. Thanks!
Irene, that's the beauty of the free market - consumers vote with their feet and their dollars. It may not be perfect, but it's a lot closer to perfect than any command economy.
Awesome job! I love this analogy and I'm so glad you put it in a post and more people will be able to benefit from it. Thanks for linking back to my post, I appreciate it.
Great way to put it. The buyers DO vote with their appearance.
Valorie,
The sellers DO seem to understand - not always like it, but they do understand! Thanks for visiting.
Mitzi,
If it helps you at all, I'll be thrilled.
Sharon,
A link is the list I could do - you inspired the post, after all!
Brian,
I'm not certain all the sellers with whom I use this love the free market nowadays, but you are right in that it beats the alternatives!
Sally,
Yes, they vote with their appearance (or non-appearance). For the run-off, they vote with their purse! Have a great weekend.
Indeed. This is worthy not only of the feature, but of a reblog as well, if you don't mind. Sellers everywhere need to understand this and accept it.
William,
Reblogging is the highest compliment - and I know you are very selective, so I'm quite flattered. Features are sweet too but to my knowledge this didn't win any stars.
Your appreciation is enough reward!
Hi, Irene,
Very clever analogy! I will bookmark for a rainy day.
Thanks Irene for sharing your expertise. I have learned a few things from this piece and will incorporate into my meetings with "rare" listers that I have.
Dana,
Hope you never have a rainy day. Or maybe that is a bad wish on AR???
Rajeev,
Thanks for your kind words. Hope it proves handy.
I'm always looking for new ways to help sellers see reality. This is a terrific way to explain how the price value equation works.
Barb,
Thanks for your kind words. I look forward to reading some of your posts too. Welcome to AR!
Although you don't have a star on the post, I did receive an email listing Featured posts and this one is there. Maybe there is a delayed reaction to getting the actual star. Congrats, it is well deserved!
I like how you put it, in clear words where sellers can understand it. Nice Post.
Irene. Interesting way of framing things for the Clients. It pays to be "patriotic."
Great post, Irene! Wow! What a novel use of analogy. This is terrific, and I will definitely use it when the need arises. Thanks again!
This is fundamental.
Sadly, the agent has already taken the listing, therefore creating false hope on the part of the seller about their net proceeds, which were no more than a fig newton of the agent's or seller's imagination.
See I don't fully agree with you. I have an amazing home that is PRICED extremely low, we really can't go any lower in price with out giving it away.... SO, in my cenario.... my seller started out over priced, I knew it, after myself and another Realtor had her listing, she came back to me and she was ready to price it where it needs to be to sell... it is priced under the appraised value and slightly above the tax assessed value... and in advertising I have all let the ppl know that the price it is at now is not set in stone. HOW many showings have we had since I relisted it????? NADA.... its not the price.... its not the home, its immaculate.... So if any of you have any Ideas on how to help me I would love to hear them. If you would like to see the home I am speaking of you can click on this link. Like I said if you have any ideas, PLEASE share with me.....
Thank you,
Christina Dinkoski, Realtor
Coldwell Banker 650 West Reatly
828-447-0095
www.ChristinaMovesNC.com
That is a great way to put it when the home is priced wrong. Then the question is....How did it get priced wrong?
There also has to be buyers out voting. Or running a campaign is for not.
There was a time a few months ago, no one was voting in our market. At least some are again. But mainly for starter homes.
Irene, I fully agree with you. I sold three homes in April. All were my past clients and one was stranger and I educated them about the market and thank God they listened and they priced at the value they wanted to achieve and the reaction....
We had three offers on the very first day on each of the listings and sold over asking about 7-14k and now I am appreciated by them.
We need to spend time with the sellers explaining them and showing them what the buyers are looking and if they get it they don't mind paying extra.
Ofcourse the homes were staged and welcoming.....The sellers did a great job when i consulted with them for staging....
I have learnt a lot from Active Rain colleagues and thanks to all of you out there with wonderful posts.
Maya Garg
www.gtawesthomes.com
I proudly serve, Mississauga,Burlington, Milton,Oakvile,Brampton and surrounding areas in the Peel and Downtown GTA condos. If you have someone relocating in Toronto, I would love to help them out.
Wow, Christina! What a lovely home... I wouldn't hesitate to buy and move in there!
Well said, Irene. Avoiding those pesky price reductions is always best. Thanks for sharing your strategy.
I like your analogy comparing selling to a campaign. Sometimes sellers need to hear things from a different point of view to get the message.
Woah, what happened to Barb's picture. In my screen it's an 8x10!
Anyway I just used a phrase similiar to a seller - the buyers have said no to this sellers price. The sellers reduced the price and buyers said no again. Buyers are voting yes or no on your house based on condition, location and price.
Well so it may be bad to get voted off the island, but it is good to get voted off the market.
Sherry - Sellers might understand but they still don't like it! At least they stop hitting me... ;-)
Mark V - Patriotic perhaps, but let's also remember most folks don't bother to vote.
Paula - I hope you never have to use this (but most listing agent will, I'm afraid).
Lenn,
While in some cases the agent does give false hope when listing, not all of us do. Wednesday night I met with sellers about our lack of offers. Showed them copies of the comps I reviewed with them in late November, which were 20% below our current price. Then we looked at the comps I gave them in late February when we listed the home, 25% below our current price.
At the time of listing, I chose not to walk away because we had a schedule of marketing activities and of price reductions if no offers had been received. I kept my part of the marketing; they've refused to drop the price one dime. I also went over that written schedule and they still balked at dropping the price.
So I did agree to try it their way but have conveyed at every opportunity the issue is price.
If I only took listings for which the sellers agreed immediately to my well-documented suggestions, I'd have NO listings!
Christina,
Obviously I know nothing about the market in NC. What I do know is that homes in my area have been selling well below the tax assessed value for 1.5-2 years. One Sussex community, Vernon, completed its town-wide revaluation in 2008 with new assessment for 2009. Many of those owners would be lucky to sell for 60% of the new assessed value. Many Vernon residents are appealling the assessment, knowing their homes are worth far less on the open market.
Lots of my sellers feel they are "giving away their homes" at prices they buyers refuse to even consider but a property is only worth what a buyer will pay for it today...
So, if you aren't getting showings, your listing is priced higher than the buyers are willing to pay for it. They HAVE VOTED that they don't care about appraisals or assessments and don't like your list price!
Mark W,
Sometimes I do take listing above what I think will generate interest. (See my comment to Lenn.)
Here is Sussex County, NJ, we share your "starter home" issue. Very little move-up buying going on, unless the larger homes are distressed properties.
This adds to the problem of realistic list prices. If no similar 4-bedroom Colonial has sold in a year, it is really impossible to target a price that will bring lookers. I have 3 hotel-condo listings, 2 different complexes - no sales in either in almost 3 years. Prices plummeting.
At what price will the buyers vote to come look? I have no idea - nor does anyone else.
Maya - Hats off to you for moving those homes so quickly. I'll have to explore your blog to learn some of your strategies!
Mary F - Don't I wish I could avoid price reductions. Some days I feel like I'm playing a game of "How low can they go?" Maybe you could come visit and stage all my listings!
Kate - The vote analogy does work a bit better than some of the other strategies I've used. Hope it brings you some success.
Lyn,
As the real estate market isn't providing sufficient income, I'm renting out billboard space to newbies on my blog!
Do you also find that the sellers accept the voting concept and then lower the price? Enough?
Irene...
I love this ... you are one sharp agent! The lack of buyer activity really does indicated how they have "voted!"
Well done, and a Gold Star for you!
Gene,
Right now, I'd like to be voted ON an island but need a few more sellers to get elected right off the market. Thanks for visiting!
Interesting way of putting it . . . thorough and accurate market research will give the seller's home a better chance of getting elected . . . will the appraiser let the sale be "sworn in"?
Great way to put it so that sellers can understand. Great Post!
Irene, hey you! It looks like the Kennedy's rock on Active Rain! Congrats on your well-deserved gold star!
Hi Irene ~ This is a super way to explain things - I'll remember it the next time I'm speaking with sellers. Thanks so much!
Liz
Hi Irene -
Great post! And just in time, too.....I've got a listing presentation coming up this week.....I'm definitely putting your words into my toolbox!
Wonderful explanation....thanks for sharing.
Irene: You have a great point.. A over priced home will not get the showings.
Hi Irene -- Great advice and have a wonderful vacation!
Hi Irene,
It can be challenging at times dealing with a Seller who has no flexibility in their list price. Sale comps usually help change their attitude.
All the best,
-Keith
Irene - Nice way of explaining things! I may "steal" this idea myself.
Great analogy, Irene! Im glad Sharon encouraged you to do this post. Congratulations on the gold star.
This is great! I love great analogies. This wont work with everyone, but it will defintley drive home the point for others. It is also easy for me to remember. Thanks.
Richard,
Your kind words are always appreciated. Before we go overboard, however, let's remember all the strategies I tried that were less successful... Next month, this one might not serve its purpose either! ;-)
Sara - If your sellers always go with your market research and suggested price, I sure hope your blog will tell us your secrets! Around here, there is a lot of "but my home..." or "Let's try it for a little while at the higher price..."
Patricia - Ditto!
Liz - May your sellers hear the message. Good luck.
Coleen - If this helps at all with your listing presentation, I shall be thrilled. Go get 'em!
Roland - Even a slightly overpriced home gets no traffic around these parts. From the comments, I clearly can tell it isn't just a Sussex County issue!
Christine - Thanks. I do find my sellers get the message. (Plus I get to blame those elusive buyers!)
Chris O - My trip was short and sweet. Hope the concept works for you too.
Keith - Despite solid research, I have sellers who refuse to price the way the market demands. Also have properties around here for which there are NOT solid comps. Current list prices are meaningless until a buyer actually bites a bullet.
Jason - Steal away! I certainly have and will nab your best material as well!
Laraine - I'm delighted Sharon suggested it too. Do I owe her half a star? ;-)
Brien - Don't we wish somethings DID work for everyone? For your sellers who listen, may it bring you progress!
Irene, the buyers vote and if you have no showings or very few, they are rejecting the price. If they want to go higher than the comps show, then I wish them the best and move on. The market will always determine the value of the home, regardless of where we price it.
Missy,
Often I do move on if the sellers aren't reasonable but if they aren't way out of line, I'll take a listing. At least in my area, there are not always current Under Contract or Sold comps.
Too, my crystal ball is sometimes (!) cloudy and we don't get showings at homes that ARE priced at what the competition sold for. Not many active buyers in my area but the ones out there can be fickle!
Thanks for your input.
The analogy is strong, the point is real that if buyers don't show up to at least look at the house then they are rejecting the price.
This is a great spin on this one. We talk about 'cutting in line' .....oh no...your neighbor just cut in line and is now ahead of you. I like the voting spin!
Congrats on being so creative! Love it!
Crystal ball cloudy........mine sure has been at times!!
Terrific post & I really like this analogy! Yep some sellers might still be stubborn, but the seed is planted that just maybe the buyers are voting against their price - it will replay in their minds when nothing happens with showings or offers. Once or twice I've used a phrase adopted from another agent in my area - "The market has REJECTED your home at this price". Definitely produces stunned expressions but it feels too harsh for me to use with most people - I like yours better!
My dad always taught me that if you price it right, it will sell. Now the true debate comes in when you try to get total all around agreement on what the right price is. Every property WILL sell for some price...our job is to find it. If the seller is not reasonable then we cannot help them....sadly in today's market sometimes appraisals and comps mean nothing if they NEED to get their home sold!
Morgan - It's been a real point in my experience. Thanks for sharing yours!
Anna - Glad you like the alternative to cutting in line. Maybe we could trade crystal balls sometimes!
Nancy - I know I fear rejection, so I see how that phrase might shake people. I will, however, file it just in case voting gets me nowhere.
Ms. Exit Hill - May I call you Jeani? Your dad is 100% correct. I hope Christina from NC returns to see what you say about appraisals and comps being meaningless in some situations - it is what I've encountered too.
Great analogy Irene - I really like what you said about, talking about the market conditions. Ifthey are declining,they are declining. We don't have to paint a picture of fear or gloom an doom. But we do need to be knowledgeable and share that knowledge.
Sharon & Greg,
I appreciate you paying me a visit too. You're right about being realistic and helping set expectations. I can't materialize buyers from a top hat, but I can keep sellers informed. Thank heavens for Excel!
I love your analogy. I find that analogies and anecdotes are often effective in helping sellers to "get it." (Unfortunately, not ALL sellers!) I will remember this one. Thanks!
Irene, Your points are extremely valid and very well expressed - good job, Karen
Lynn - Hope it works well with your sellers. Thanks for your visit!
Karen - I appreciate your kind words!
Irene,
I like this and will have to incorporate it into my presentation.
Hi Irene, Congratulations on your featured post. I like the idea of buyers voting, that's a good way to present it to the sellers. Somedays, it seems many would-be-buyers aren't going to the polls at all, though! I hope they get out and vote!
Brian - Glad to be of any assistance I can! Thanks for stopping by.
Mary - Thanks for taking the time to say hello. Let's both encourage more buyers to hit the polls!
Irene,
What a great way to present the truth to sellers! Congrats on the featured post.
Mike in Tucson
Mike,
I appreciate your kind words and visit to my humble blog!
What a great way to put it!
I can see why this post was "Featured Post" worthy!
Well done my friend!
Craig,
Thanks. My favorite part of your comment is "friend." I'm honored!