Back in September I received inquiries from two different sellers who were unhappy with their agents because their houses weren’t selling. Both expressed an interest in having me represent them. While it’s against the Realtor code of ethics for an agent to solicit a seller who has a signed listing agreement with someone else, it’s okay to take calls from such sellers and find out when the listing will expire. Although I’ve never done it, a Realtor can actually sign a listing agreement with someone else’s seller, effective the day after the first Realtor’s listing agreement expires.
Property #1 was originally priced near $2 million and had come down somewhat, but I thought it should be priced at $1,500,000. I knew the other agent so I called him to give him a heads up that his clients were considering a switch. We talked for a while and it was apparent that they weren’t going to come down where they needed to go. I called the seller back after doing my price analysis and told him where it should be priced, which was exactly what he didn’t want to hear. He wanted his price, and believed his property was worth at least what he was asking. His agent came back to him and got the seller to come down $100,000 but they were still too far off where they needed to be. The end result was the seller recently pulled the property off the market and will be renting it. That’s the kind of dynamic we saw when the market last turned.
Property #2 had already had two large price reductions, and from what I could tell it was exactly where it needed to be to attract an offer. I told the seller that they, and their agent, had done a great job getting the house ready for the market and that it showed very well. I advised them to be patient. In this market things are moving a little slower, and it can take time to attract an acceptable offer even when a seller is at the right price. Sure enough, two weeks later they accepted an offer and they recently closed escrow!
Being at the right price, and following your Realtor’s advice will make all the difference as we move forward. We do this for a living, and I’ve been doing it full time for over 18 years now. I’m not always right, but I’ve got a pretty good track record. Last week I received a call from another potential seller who wants about $400,000 - $500,000 more than the house is worth. The house has a startling amount of deferred maintenance, and if I were to rate the way it currently shows I’d have to give it 1 out of 5 stars. Because he is stuck on his number, I believe he has a zero probability of selling the house. If I was going to work with this seller I would not be blogging about him right now, but I won’t be. I can’t. I just don’t want to get into a situation where a property is massively overpriced and a seller will not consider reducing the price.
Don’t get me wrong, I think it’s fine to price a property a little higher to test the market, although it’s become a sketchier proposition as we near the end of 2022. Of course most agents, myself included, prefer to be a little bit under the market value (especially in this market!), but the key is flexibility. As long as the seller is open to reducing the listing price in a reasonable amount of time, and they aren’t too far off the perceived market value, the property should sell.
The reality is we’ve entered more of a buyer’s market now. I’m hopeful that will change by next spring. Ultimately it doesn’t matter what a seller needs or wants to get from the sale of their home, it’s what the best buyer is willing to pay for it and what a seller will accept. There is good news for sellers. Home values are still WAY UP.