New Milford, CT real estate talk. Why I don’t overprice homes.
Recently I read what I consider to be one of the most important posts written about real estate, it was about the true meaning of “market share”. This concept is something most home owners and many agents don’t understand. Virgina Real Estate Broker Lenn Harley wrote the post I am referring to, “Why agents take overpriced listings. What brokers don’t want agents to know! It’s all about market share!!” I feel very strongly this is something ever seller should read. If they read nothing else about pricing a home, this is it. I know the article was speaking to agents, as the title reads, but if you are even thinking about selling your home in the New Milford, CT area this is a MUST READ.
I do not include a “market share” report for my company in my CMA’s, I have never felt those numbers told much of anything. The figures look impressive to be sure, even I admit that. Ms. Harley insists the figures show how many overpriced listings a company has rather than how many homes they are selling. I think a personal rundown of the agent’s list to sale price, the agent’s marketing ideas for your home, recommendations from previous clients, these are things you might want to ask for. And even list to sale price may require an explanation. Was it a short sale? Did the agent agree to take on the listing at a higher price for a particular reason? Did the agent build in automatic price reductions?
I spend a great deal of time arriving at the price I think your home will sell IN THIS MARKET. I have been asked why my price is lower, why my price is different, would I be willing to price it higher. I have worked hours over a market analysis, met with owners, then saw it come on at a much higher price than I gave them. Some people have called or emailed and explained they just wanted to get the highest price possible for their home.
But dangerous? Yes, I believe that overpricing is a dangerous business practice. And here are a few reasons why.
- If the seller NEEDS to sell, overpricing will mean they WON’T sell. Buyers are NOT overpaying for homes these days. Lenders are not loaning money for overpriced homes. End of story.
- If you NEED to sell and I am not realistic about the sales price, if I am not up front and honest with the seller, I play a part in process as it spins out of control for the home owner.
- I spend quite a bit of time on marketing my listings. It costs me time and money. I don’t get paid for my time nor reimbursed for any outlay of money if the house doesn’t sell. This is a dangerous and foolish business practice on my part.
- The relationship between a real estate agent and an overpriced seller deteriorates rapidly. This is not only unpleasant, but damaging to my reputation. The chances of me getting the price adjusted down the line are slim to none. The chances of the seller listing with someone else are very high. I don’t win and the seller doesn’t win.
The next time someone mentions their companies market share, ask them what that really means. If they don’t understand the true concept of market share you are in trouble already.