When I take my buyers to look at listings, we usually start at the newest listings and move backwards. Why? Because there’s usually a reason homes are still on the market some 30 and 60 days from when they first came to market. In a market like we have now, where average days on market are less than 30 days, every able buyer in the marketplace has been through the home within the first two weeks and they have rejected the asking price.
Even with this experience, I’ll still take buyers to houses where the house has sat for months. We usually go in and by the first room the buyer is ready to leave. I suspect I’m a little different than many real estate agents, because as long as my buyer is serious about purchasing a home, I will show them everything listed.
There’s always a justification for the asking price of a home. Real estate agents can pull comparable properties from as far away as they need to in order to justify an asking price. Even when there aren’t comparable sales available, the owner may be committed to going to market at a certain price, regardless of any reliable data.
Some sellers are convinced that if they don’t choose a number to list that is to the high end, when they negotiate with a buyer, they will lose money. I don’t see it work that way in the real world. For one, the agent for the buyer isn’t going to put in an offer without looking at comparable sales. Similar to the justification of a high asking price, the agent can look at plenty of houses and come up with a lower number. Second, when a price has way too high of an asking price, the buyers feel uncomfortable offering anything at all. Third, the high asking price sends a signal to buyers that you aren’t really interested in selling your home and you’re more interested in wasting people’s time.
Therefore, here is the one thing you need to be doing.
If your house has been on the market in this seller’s market for 45 days and you don’t have an offer, and no showings scheduled, drop the asking price.
I’m sure that there’s a reason the price is set where it is. Unfortunately, buyers don’t care that you spent $10,000 on a bathroom remodel and now want $15,000 for the trouble. If you remodeled your kitchen in 1980, your kitchen is 38 years old. The new buyers may not have even been born since you last remodeled!
There’s nothing wrong with you placing a value on your home. If you don’t want to sell the house, leave it at that price. Unfortunately, the longer you have the house on the market, the worse the offers are going to come in. In fact, if you aren’t going to lower the asking price, you might as well take the house off the market. Try again in a few years or something.
You may want to fire the agent. I don’t know what other agents do during listing presentations. Maybe they promised you that they could get that price and had no idea you would leave them if it didn’t work out. This is called “buying the listing” in the world of real estate sales. You tell the seller that you think it will sell for a ridiculous number, while another agent gave you a realistic price range for your home. You go with the high number because you want to believe that the house will sell. After all, you bought it, why wouldn’t a buyer be thrilled to own something you did? What happens to the agent who came in with the realistic asking price? Well, they didn’t get the listing, because of the asking price. So now, you are listed with someone who missed the price. Shouldn’t that agent pay for their error?
Amazingly enough, I’ve seen sellers kick their agent to the curb and then list with an expired listing specialist at the same price! What is the point? Well, the new agent trashed the old agent so they could get the listing. Think about it like this, it’s much easier to blame the real estate agent than it is to take a serious look at the asking price. When the house doesn’t sell again for weeks, what do you think the second listing agent is going to recommend? Lower the price!
At Deerwood Realty, we discuss all aspects of the listing process before we go to market. There are very different listing strategies for different situations. We also ask the question, “What are you going to do if the house doesn’t sell at x price?” We feel that this is an important question because it gets to seller motivation. If a seller isn’t motivated to sell their home, there’s really no point in us listing the home. This is also a way to be upfront and honest with our sellers. That might not be what our sellers are looking for, and that’s ok. There are more than 8,000 real estate agents in St. Louis, I’m sure one will tell them whatever they want to hear. Just don’t expect to get your home sold at the price you are asking.
John Schink is a real estate broker in the St. Louis metropolitan area who specializes in full service listings and buyer agency. He is a member of both the Saint Louis and Jefferson County Boards of Real Estate. If you are looking to buy a home for sale in Saint Louis, Missouri or the surrounding metropolitan area or considering selling your home, or for general real estate related inquiries, he can be reached at 314-707-4821 or [email protected]