Sellers, agents dont know exactly what a property is worth!
November 10th, 2014 by Geoff Baldwin
The first sign of a real estate agent who doesn’t understand the market is when he or she tells a seller what they achieve for the sale price of their home according to RE/MAX WA Managing Director, Geoff Baldwin.
“Sellers often seek three or more appraisals and then demand that the agents advise them accurately on how much their property will sell for, but the agent they should list with is the one who refuses to play that game of Russian Roulette”, Baldwin said.
“To test this theory sellers should ask themselves this question. If 3 buyers wanted to make an offer on my property and none of them knew my asking price, how varied could the offers be? “On a property where the expectation is say $1,000,000 the offers could vary by $300,000 or even more, so how in the world can any agent predict the outcome with any degree of accuracy or confidence?
“Of course agents should discuss market evidence, recent sales, market conditions, etc with their sellers and a mutually agreed expectation should be established but that expectation should not be made public.
“The best agents will simply not get into a price argument but will always demonstrate methods that ensure maximum price and for many reasons this is rarely achieved by promoting a property with a fixed asking price.
“Methods such as Auction and Buyer Feedback Ranging are wonderful alternatives that ensure prospective buyers are not scared off by a high asking price and also that the eventual selling price is driven by the buyers emotional attachment to the property and the negotiation skills of the agent.
“The biggest motivator for buyers is emotion but they cannot fall in love with a property they never see and unfortunately many buyers miss out on seeing properties because they are initially well overpriced.
“In this situation everyone loses in that the seller’s property is stale by the time the price is dropped to meet the market resulting in a much lower price and the buyers who may have bought it never even placed it on their viewing list”, Mr Baldwin said.