The Power of Honesty: Hire a Realtor Who Will Tell You When You’re Out to Lunch

Have you ever heard the term ‘buying listings’ before? This is an industry term that Realtors sometimes like to use, when we see a home that is obviously – and significantly - overpriced. This occurs when Realtors promise the moon to sellers, even though they know that the asking price the sellers want is unfeasible in the current market. They agree to list the home at a high price up front, thereby securing the listing for themselves and then letting the market do their job for them and beat the sellers down over time. They will eventually sell for the lower price that was more in line with the market to begin with, but by then, this home will have spent an unnecessary amount of time on the market, and quite often will sell for less than they could have, had they just listed at market value from the outset. The Realtor in this case either isn’t acting with the seller’s best interests in mind, or they just aren’t strong enough of an agent to deliver the truth to their clients, for fear of losing the listing. Selling a home is a significant financial decision, and determining the right listing price is crucial for a successful sale. While some homeowners are tempted to work with a Realtor who promises an unrealistically high valuation, it is far better to collaborate with a Realtor who provides an honest assessment of your home's worth – even if it’s not the number you want to hear. 

Realistic Pricing Attracts Qualified Buyers

One of the primary advantages of an honest home valuation is the ability to attract qualified buyers. When your home is listed at its true market value, it appeals to potential buyers who are genuinely interested in your property. Serious buyers are well-informed and conduct extensive research to ensure they make informed decisions. Every Realtor has sat in a listing appointment and heard their potential sellers use the term “It only takes one!”, when trying to convince their Realtor that their home should be listed (too) high. But if they really stop and think about it, what they are really saying is “we just need one uninformed idiot to write us an offer”, because that is the only reason that a buyer would seriously overpay for a property (white hot over-heated markets being the exception). With today’s access to information online, if they are at all savvy and working with a decent Realtor, there is no reason for a buyer not to know all of the available comparable property information, and there is zero reason for them to pay a price that is out of line with the market. By pricing your home realistically, you increase the likelihood of attracting serious buyers who are willing to pay a fair price, leading to a smoother sales process and a higher chance of closing the deal. 

Faster Selling Process

A realistic listing price sets the stage for a faster selling process. When your home is priced accurately, it generates immediate interest among buyers and Real Estate agents. Buyers who have been searching within a particular price range are more likely to notice and consider your property, resulting in a higher number of showings and potential offers. With increased interest, you have a better chance of receiving competitive offers and selling your home in a shorter time frame, minimizing stress and reducing carrying costs associated with an extended listing period. Nobody wants to live in a show home for any longer than they have to! 

Avoiding Stagnation and Price Reductions

Overpricing your home can lead to a prolonged listing period and, subsequently, the need for price reductions. When buyers are in the market for a home, they practically live on the MLS, and know every single home in their price range. When a home sits on the market for an extended period, it can become stale, losing its initial appeal to buyers – and they will start to ponder the classic phrase, “I wonder what’s wrong with it…?” With time, you may find yourself in the uncomfortable position of having to reduce the price to attract renewed interest. By starting with an accurate valuation, you can avoid the frustration and financial implications of prolonged stagnation and price reductions, enabling a smoother transaction from start to finish.

Maximized Negotiating Power

When your home is listed at its true market value, you have a stronger position during negotiations. Buyers are more likely to engage in productive negotiations when they perceive the listing price as fair and reasonable. An honest and accurate valuation provides you with credibility and confidence, allowing you to negotiate effectively while still achieving a satisfactory selling price. On the other hand, overpricing can create skepticism and discourage potential buyers from even making offers or engaging in negotiations, as they feel it is a waste of time – thereby undermining your ability to achieve your desired outcome.

At the end of the day, the idea of “price high-sell high” rarely works, and in many cases can produce the exact opposite result. There are three things that the market cares about, and three things it doesn’t. The market cares about the availability of comparable properties in the area, the current economic conditions, and the location/physical condition of your home. The market does NOT care about what you paid for your home, what you want, or the cost of any updates you put in. By choosing to work with a Realtor who will tell you what you need to hear (and not just what you want to hear), you increase your chances of achieving a satisfactory outcome and ensure that your home sale journey is as smooth and rewarding as possible. 

At Permack and Associates, one of our team core values is “We will always do what’s right, not what is easy” and I think that starts with telling some of our clients that they’re out to lunch…