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From the time a Real Estate Agent first lists a property to a few weeks into the marketing campaign, market conditions in the suburb or city could have changed. Yes, that quickly.
It’s in your best interests as a Vendor, and certainly the Real Estate Agents, to price a home for sale in accordance with the market at the time. Real Estate Agents do considerable research in the immediate area, monitor sales and compare local property prices. Not only to get the best sale price possible for you, the Vendor, but because prospective buyers WILL have done their own research on properties in the area.
Most Vendors want both a quick sale and the highest possible sale price. An unrealistically high sale price will ensure the property stays on the market longer – and in that time, market conditions could change and the value of the home could drop.
Real Life Case Study from Amkar Real Estate. Sega-Elias Awkar explains;
A property was put on the market during conditions that indicated it could obtain a certain price. The vendor wanted a higher price and, as an agent, I am obliged to test the market at the higher-than-recommended price, even though I advised against this.
During the sale period, many people came through who would have purchased at my advised price. Prospective buyers thought the vendors price was too high. Some weeks into the campaign, sales activity in the area changed and the price dropped considerably from my original pricing.
Statistically, there was a strong decline in the market and particularly in that suburb. I advised the owner to decrease the asking price and he only agreed to decrease it to my original advised price. By this stage even our advised price was too high and therefore the owner was facing the issue of accepting much lower offers.
This is why I strongly advise you listen to your Real Estate Agent with regards to price. Please remember, the agent doesn’t dictate the price the market does. As a diligent real estate agent it is my job to gauge the market and use feedback to re-assess over-priced homes. However, if the vendor refuses to take advice from a real estate agent this could result in a no-sale or a major decrease in price when the market changes rapidly.
If you are serious about selling it is always advisable to take advantage of the true market price at the beginning of the campaign before any unexpected changes take place. Starting over-priced and decreasing later will cause you to push away hot buyers at the beginning of a campaign. A property with a reviewed price can be considered less attractive than a home fresh to the market with a good price..
Pricing is not an exact science and market conditions do fluctuate, and it’s not just because of interest rates. Neither the Vendor nor the Real Estate Agent might know that, for example, a freeway or mall complex is going to be built nearby. That information may only come to light weeks into the marketing campaign. Moreover, neither party is at fault; it’s market conditions.
Similarly, issues with adjacent contaminated land or the development of high-rise apartments nearby could have an adverse affect on the attractiveness of a property.
A competent and market-aware Real Estate Agent will regularly review the situation and keep their Vendor informed on a weekly basis. Additionally, feedback from the public during open and private inspections will clearly indicate if the asking price is correct, or excessive.
Sega-Elias Awkar is a Real Estate Agent with Amkar Real Estate and prides himself on being as transparent as possible when working with Vendors and Buyers. Sega will conduct thorough research prior to listing a property, will remain in close contact with Vendors and encourage communication with prospective Buyers.
For a no-obligation and free appraisal of your home, please contact Sega on 0432 434 173 or e-mail him on firstname.lastname@example.org.