And avoid the downward real estate escalator.
by Neil Jenman
Reading Time: Apx 3 mins
When I was an agent, there was one promise I refused to make to sellers. I never promised to sell their home at a specific price.
I did make two promises, however. First, I promised that the price I got for a home would be the highest price and second, no other agent would get a better price.
An agent’s job is to sell a property for the best price. That’s it. How can sellers expect more from an agent than the best price?
Unfortunately, many sellers do expect more. Especially when the market is stagnant or falling – which is happening in many areas now.
As the new year approaches, many agents are struggling to get prices demanded by sellers. And agents silly enough to promise a specific price are looking incompetent.
In fairness to agents, they can’t be blamed for the market. Agents can be blamed for many things – being lazy, telling lies, charging needless expenses – but they can’t be blamed for the market. Sure, many agents take credit for high prices when a market booms but when the market stagnates, no agents accept blame. That’s their nature.
A DANGEROUS TIME.
It’s a dangerous time for many sellers now. They expect – or have been promised – a certain price. But after weeks on the market, they are not getting the price they expected.
The first thing most sellers do is blame the agent. But let’s be clear: No agents deliberately don’t sell houses. Your agent wants to sell your property.
So do other agents in your area.
And when other agents see that your property has not sold, they start contacting you. They are like sharks circling wounded prey. They will say they can’t understand why a property as good as yours has failed to sell. They’ll suggest that your marketing is not right. Most of all, they will tell you what you want to hear – they can sell your property for you.
And, at the price you want.
Don’t believe them.
THE SECOND AGENT SYNDROME.
When the agreement expires with their current agent, some sellers leap into the waiting arms of the second agent (or is that the jaws of the second agent?).
What happens next is as predictable as the sun setting each day. The other agent sells the home – for less than the first agent.
Indeed, in many cases, sellers reject offers from one agent, then switch agents, and sell for thousands of dollars less than they were previously offered. Ouch.
PRESSURE IS PART OF THE PROCESS.
On the weekend, I spoke with a lovely seller from Sydney. She felt the agent was pressuring her. After hearing her story – and knowing the agent (one of the good ones), here’s what I said: “It’s the process that’s causing pressure, not the agent. Selling a property is always stressful.”
And then I asked: “Will your life be better if you accept this offer and sell now?”
After some thought, she agreed, yes, it will be best to sell now.
TIME OR PRICE – PICK ONE.
In real estate, you can pick a price at which you’d like to sell. Or you can pick a time when you’d like to sell. It’s near impossible to pick a perfect time and a perfect price.
The question you should be asking is: How long must I wait for the price I expect?
Of course, no one knows.
But, in the short term – weeks or even months – the price is unlikely to climb. The longer you wait the less you get. Unless you wait years.
So, beware the spiel of a second agent smooching up to you, acting friendly. Remember Little Red Riding Hood? What big teeth you have!
Better the agent you know – especially a good one trying hard – than hiring a second agent and surely selling for a lower price.
DROPPING IS NOT LOSING.
One of the most common things sellers say when having to reduce price expectations is: “But I have already lost two hundred thousand dollars (or whatever amount).”
Expectations, as optimistic as they may be, are not assets. You can’t lose what you’ve never had.
And besides, most sellers are making an enormous profit compared to their original purchase price, albeit many years ago.
THE ESCALATOR EFFECT.
The sellers who are losing, however, are those too stubborn to accept reality. Those who blame their agent instead of their inflated expectations.
These sellers are falling for what I call “The Escalator Effect”.
The escalator goes down and they go down – but only one step when they should take two steps.
By the time they take two steps, the market is on the third step.
And on it goes. The longer you stay on that escalator the more the price goes down.
Don’t follow the market down in price. Don’t be stubborn – or, that awful vice, greedy.
If your home has been for sale for more than 30 days and you’ve got a decent agent, listen to their advice. Consider any offer you get. It may be the best offer you’ll get for a long time.
It may also allow you to move on with your life.
And live happily ever after, as the saying goes.