Listing Prices in Today's Market

Today's market is volatile. With record low interest rates and rampant foreclosures, buyers are less willing to pay top dollar for homes. They know good deals are out there and aren't willing to pay more. This means sellers must list their home competitively.

Sellers are competing with foreclosed homes down the street that have the same amenities for a fraction of the cost. They are also competing with newly constructed homes which builders are desperate to move.

As an agent, you will face sellers who are unwilling to accept that their home is now worth less than it was just a few years or months earlier. This can be an especially hard pill for underwater sellers to swallow. No one wants to sell their home for a loss, especially in today's economy. Yet, people still get new jobs and have new life changes that mean they need to move on, move up, or downsize.

It's your job as an agent to help your sellers understand why listing prices are so important.

With prices, it's about first impressions. Think about how you shop online. Google and eBay are great examples. You search for a particular item and right off the bat weed out the top priced products. After all, in most cases it's basically the same thing. Why would you pay more?

There is only one reason you'd fork over more money. That is if the product or transaction will have certain perks. In real estate transactions, those perks could be sellers paying for closing costs, paying for inspections, having inspections done ahead of time, and having high-end finishes or a move-in ready home. These perks aren't worth what they once were, but agents can still market them, which can be helpful when you have seller unwilling to drop their price.

Homebuyers also begin their home searches online. In most cases, they set search parameters based on their budget. By pricing a home lower, you are more likely to be included in more searches.

Sellers need a little coaxing in order to lower their asking price. Be prepared to show them recent sale prices, value trends, and area comps and foreclosure research. Sellers want to see hard numbers. They have a lot of money at stake.

Explain to sellers the benefits of being priced under the competition. You are more likely to get foot traffic and showings. You are more likely to have multiple offers. These could easily translate into a sale, especially if a home is staged to its best advantage. Homes that are overpriced, however, end up sitting on the market for longer. This could means months or years of waiting.

Letting your seller know how buyers think is important. Buyers in today's market are savvy. They have the upperhand during negotiations. With a 9.5 month supply of homes on the market, demand is far less than supply, which means they have sellers right where they want them.

Sellers must price their home for what it is worth in today's, not yesterday's, market. Be patient with sellers and take the time to explain why getting the price right is important.

Written by Realty Times Staff for www.RealtyTimes.com Copyright © 2011 Realty Times All Rights Reserved.