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Sunday, August 06, 2017

Setting The List Price: Let The Market Do The Arm Twisting!

Real estate agents should not have to twist a seller's arm to list a property within the market range.  At least, that is the case for me.

I prefer to let the market do the arm twisting.

There are many reasons why sellers want to list their home at a certain, oft pre-determined, price.    Sometimes a seller reasons with "Well I paid this plus I have put this much into it and..."

Buyers do not care what a seller paid for their house or prices paid for any maintenance or updates.  Sure that pool was nice in the summer but do not expect to get a dollar for dollar return!  Nobody cares about a seller's mortgage situation - except the seller and the bank!

Some sellers are quick to point out "the same house sold for "X Dollars" down the road."   Sometimes "same" is not the "same."  The properties may have been the same on day one but through the years sameness can vanish somewhat.

There may be a new AC, updated kitchens, recent roof replacement or something beyond the "same" floor plan.

Sometimes "down the road" is not exactly an apples to apples comparison.  All locations are not equal.  Lets face it, a home in Viera or Suntree is worth more than the same house in Palm Bay!   Some locations are just more desirable due to amenities, schools, crime rates or just "perceived" differences.  You can change the paint color or some other characteristic but you can't change the zip code!

Even the location within the development can make a difference. Views, locations on the golf course direct versus being in a golf course community makes a difference.

Is the difference real?  If there are differences are they over improvements and not "value added?"   

Finally , the one that can potentially create the most friction (in my opinion) or at least cause a seller to choose another real estate agent is the  "Because Zillow said its worth this amount. So that is the price I want"

Sellers need to understand that Zillow is not a local market expert.  Zillow uses raw data and some algorithm to come up with a value that may or may not be accurate.   The same can be said about any other automated valuation system.

If an entity is not local, it is relying on data that may or may not be accurate.  The value may not be taking into consideration current events, issues and concerns.

Pricing a home for the market takes a seller's circumstances, goals and situation into accountAs far as I know there is no automated value determination system that assigns value (or even understands) all the data points and considerations that go into pricing and selling a home.

Ultimately a house is only worth what someone is willing to pay for it.  While there are qualities that influence worth like location, size, general condition and any special features (like a pool, gated community, etc.), in the end your home is only worth what a stranger under no unusual influences or pressure is willing to pay (an arm’s length transaction).

It is not necessary for a real estate agent to twist a seller's arm to price appropriately - the market will!

Ready to sell your Rockledge, Florida home?  Call or text me at 321-693-3850 for a free market analysis.

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