This makes me feel sick…and it’s not the first time a seller has lost out.
Last year I got a call from an agent in New York asking for a price opinion for her relative that lived in the area. Their home was already listed with another Realtor, and it was not selling. I had just sold a home nearby, and I knew what was happening in that neighborhood.
So I prepared the information and sent her the package. Well…I didn’t get the listing because I suggested a price lower than another agent they also called. Of course I was bummed, but I moved on and forgot about it. When I was cleaning out my files this year, I found this property so I decided to take a look in the MLS to see what I’d find. Here’s what I found:
- The original agent had the house listed for over $675,000 for six months and it did not sell.
- I suggested a list price of $639,000 and to entertain any offer over $600,000.
- They chose to hire another agent who listed it for $659,000.
- That agent did not sell it and they hired a third agent.
- After numerous price reductions the property sold for $500,000 a year after I gave them my suggested price.
This seller lost over $100,000 because they did not price it right to begin with.
We call this “chasing the market down.” You can see from my highly technical drawing what this looks like.
Point A – The original listing price of the property.
Point B – The price of the first offer that comes in, which the seller deems is too low. The
offer is rejected, but as time goes on and no more offers come in, the seller eventually drops his price to this point.
Point C – The offering price of the second offer. Again, the seller rejects this offer because it is just “too low”, and the home sits on the market. Eventually, the seller drops his price to Point C, but it will be too late because that buyer is now gone as well.
Point D – Once a seller has been through this enough times, they are so afraid that they
will never get another offer. The next offer that comes in, even if it’s very low, will usually be accepted because of the seller’s fatigue and fears.
In the end, when a property is over priced from the beginning, it is the seller that stands to lose tens, or even hundreds of thousands of dollars. It’s so important to price your home aggressively from the start of the listing because in the end you will get a higher price than if you “chase the market down.”
If you are planning to sell a home, condo, or apartment building, please contact the Zapata Group today at (800) 573-1520.
Zapata Group specialties include:
- Negative Equity Short Sale Negotiations with Wachovia, Wells Fargo, Bank of America, Citibank, CitiMortgage, and Chase banks.
- Standard “Equity” Home Sales
- Luxury Home Short Sales and Luxury Equity Homes For Sale
- Trustee and Probate Home Sales
- Corporate Relocations
- First-Time Home Buyers (Low down payment assistance available!)
- Investor Home Purchases
- Bank Repo and REO Buyer Representation
- Residential Income Buying and Selling
- Bank Repo/REO Sales
- Bank Repo BPO Valuations
- Relocation Certified
For more information about how we market homes visit www.aaronzapata.com/sellers
For more information about our team visit www.aaronzapata.com/aboutaaron
You can also find us on Facebook at www.facebook.com/aaronzapatarealestate