When the time comes to sell your house or condo, and you decide, like 90% of home owners, to 'list' your home with a real estate agent, how do you select from the 1400+ REALTORS® in Winnipeg? With some many choices, you would think that the choice would be a difficult one. Well, not really, as about 95% of agents follow the same program: List the property on the MLS® and let the system do the work. Nothing wrong with that, but there are a few other upgrades available.
In Winnipeg, REALTORS® seem to have 3 different ways of getting the home owner to choose their service: Quote the highest listing-price, Offer the lowest possible commission or (gasp) Offer an outstanding service coupled with an excellent marketing plan.
In this 3 part series, I will explain the pitfalls of the first 2 options, starting with that age-old favorite of the desperate agent: "Quote the Highest List Price".
So here is the scenario: You (the home-owner) call 3 agents to ask their opinion as to the value of your home. This is actually the wrong thing to do, as it invites agents to promise and predict higher and higher selling prices. Instead, the owner should be interviewing agents to find out their marketing plan for the home which is being sold. Anyway,.... I digress.
So agent #1 comes into the home, and the discussion turns to the value or price of the home. The agent pulls out some comparable properties and they seem to indicate a sale price of approx. $200,000.
The next day, agent #2 enters the home, and his comparable properties also seem to suggest a sale price of $200,000.
On day three, the miracle worker arrives: He looks at the house, (or condo) and 'ooohs' and 'aaahs' over the selection of colors, the 'stunning' beauty of that crystal chandelier, the functionality of that re-painted kitchen. Yes, his comparable properties also indicate a sales price of around 200,000, but since he runs a big team of agents, he is confident that he can get $220,000 or maybe even $230,000.
When reading this article in the cold light of day, we all realize the projected outcome, and we are likely to say :"Oh, come one.... this would NEVER fool ME." Well, folks, it happens every day.... and it works!!! Home-owners like to hear nice things about their homes, and they love positive projections and predictions, and so the "Big-Team" leader gets the listing. Many times with predictable outcome. Here's an example of what happens:
Agent #1 suggested a list price of $199,900.
Agent #2 suggested a list of $214,900. Homeowner lists with #2. A few weeks into the listing, the price is reduced to $204,900 and then again to $199,900 and the home finally sells for $197,000.
IF the home had been listed at the proper price in the first place, it would most likely have sold right away, and very likely even with multiple offers, driving the price up from $199,900. Instead, it languished on the market, and after a few weeks, and a couple of price reductions, the 'bargain hunters' start coming out.
The home owner in this example probably never realized that a 'big team' has obligations to feed their assistants, and as such, the pressure to get the listing "at any price" is great. The reasoning is :"Better to get the listing at a high price and then reduce it later, than NOT to get the listing at all".
Now I wish to assure you that NOT all agents operate like this, but as a homeowner, please remember this: Look for other difference between agent #1, #2 and #3, but DO NOT choose by the higher quoted listing price alone.
Until then, if you're thinking of selling your house or condo, please call me anytime for an objective opinion and diverse marketing plan for your home.