When the seller thinks proposed LP is too high (agents, listing, sellers)
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How do you pros react when a seller disagrees with your proposed listing price, thinking it's optimistic? Do you worry that potential buyers may believe something is wrong with the property if it's priced below what you think is fair market value? Would you push for your higher LP?
We think the world of the broker we've worked with on several house sales/purchases. However, he's a bit biased about our current house and was shocked when I told him what we expect to list it for either in the fall or early next year. I know it would cost at least twice as much to replicate, but big houses are not selling well in our market.
The LP we expect to start at is about 85% of what the broker suggested. It's clear he feels bad about the hit we'll take. I told him we've already lost the money, we just haven't yet recognized the loss. I've been tracking sales of similar houses in our area for the past few years and think we're being realistic. We want our house to be one of the few of its size that sells within the first six to 12 months of its listing.
From an agent's perspective, do you see any downside to what we propose doing? Thanks for your advice.
I would clearly mention to the client that I thought their proposed price was low, only with that input backed by recent closed comparable sales.
Then I would confirm that the client wanted the listing price they mentioned, and I would list at their proposed price.
Thanks, Mike. That's how I hope our broker will react when the time comes to list. He's a successful broker/owner but seems to have a bit of a blind spot when it comes to this house that leads him to think buyers will pay a premium for it compared to similar size/age/finish quality houses.
This would be a first for me... my clients generally want to list for more than my research suggests! It’s great that he wants to get you more for your house, but do the comps support it? Since you mentioned sales are slow for homes like yours, pricing it at the low end of the comps and prepping it for the market by staging (consultation could help you with furniture & decor placement, paint colors etc) should help you be the next in its range to sell. During the downturn we used to explain to our clients that selling your home means you’re in a price war and a beauty competition simultaneously. Buyers must see the value in your home vs the others on the market in order to move forward and buy it. Sounds like you already understand that! Wishing you all the best!
I have this same exact situation right now with a listing I have coming soon.
What do you do? Do as you are told by your client and document where you proposed a higher list price so that they can't blame you when the one down the street with the same floorplan sells for 10k more.
In the market I'm in there's a pretty good chance multiple-offers will drive the sales price closer to where I suggested anyways; but best to CYA.
From an agent's perspective, do you see any downside to what we propose doing? Thanks for your advice.
The only potential downside is that your broker might be right. Ultimately, it's your decision as the Seller to determine the list price, but you should first have a conversation with your broker as to why he feels that a higher list price would be in order. Maybe he knows of recent comps which could justify a higher price.
Setting a list price can be a rather difficult decision for a Seller. Although most Sellers don't want their house to be sitting on the market without getting any offers, neither is it desirable to leave money on the table. Good luck in reaching your decision.
I would clearly mention to the client that I thought their proposed price was low, only with that input backed by recent closed comparable sales.
Then I would confirm that the client wanted the listing price they mentioned, and I would list at their proposed price.
Location: Danbury CT covering all of Fairfield County
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In most cases, I have found that it's the home seller that thinks the agents price is too low, despite a full explanation of the market and comparable properties in their neighborhood.
I'd be more than willing to acknowledge, in writing, that our broker proposed a higher LP but I don't expect him to ask that. I've watched the comps for the past few years, not that there are many good comps, and feel comfortable with a lower LP. The absorption rate for houses this size and price range is >3 yrs. I'd obviously like ours to be one of the few that sells in the first year.
It doesn't help that there have been some distress sales and I know of one house that's likely going to auction this spring. Our house is < 15 yrs. old and has been updated or enhanced in some areas. However, if a buyer wants to "put their own stamp" on a house (thanks HGTV) then they may prefer a bargain even if it's been stripped out. OTOH, some of the big houses that have sold in our area look very dated to me with over the top decor that borders on gaudy.
We're ready to enjoy retirement, part of which means significant downsizing and moving near family. Thanks again for your comments.
If you go with the lower list price. Have him put in mls that all offers need to be dubmitted by "x" date, and will be reviewed on "x". So it would encourage multiple offers and give you a chance to review all of them.
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