hi John;
Thank you for meeting with us the other day. We liked what you presented and your marketing approach. But we had another agent in who told us she would price the home $45,000 higher (15%) and see if a buyer would be willing to make us an offer. She also said that she would reduce the commissions to help us save some money.
We are having troubles making a decision, because we know you’re the better Realtor but $45,000 is a lot of money… can you match what she’s offering us?
- Name withheld
Hello {name}
Thank you for the email, I appreciate your honesty here.
You’re right, $45,000 is a lot of money. A whole lot! It’s also a lot of money to the buyers out there, who are comparing your home directly against your competition.
If you recall from our meeting, we looked through the active competition and recent sales. We agreed together that your home was worth a certain amount, not based on what we would LIKE to get, or what sounded really nice, but based upon what real buyers are willing to pay for similar homes to yours. The numbers, to be blunt, didn’t lie.
The link below will give you access to the homes you’ll be competing with at the higher price point. As you can see, they’re larger than yours with more features, and in many cases significantly newer than yours. Realistically, you can’t possibly compete with those homes. They’ll slaughter you and you won’t sell at that price. As we move into the spring market, competition is going to increase; which isn’t good for a home that’s over priced.
{link removed}
Even if we were to find a buyer willing to pay $45,000 more for your home, the banks would never appraise it at that value. Which means the sale wouldn’t complete even if we managed to put a sale together! The only possible buyer is someone with 100% cash to buy your home, and no intelligence to notice that you’re over priced. I’ve noticed that people with that kind of money aren’t usually the type who over spend; which is why they have that much money.
The danger of over pricing your home is very real. Realistically, once buyers have “written off” your home, they won’t reconsider your home simply because of a price reduction. Remember that you have the most buyers for your home in the first 3-4 weeks of being on the market, after that the only people who will consider your home are the new buyers coming into the market. That’s a significantly smaller number of buyers, probably only about 5-10% of the buying population.
By over pricing your home, the other agent is achieving a simple goal for herself. She’s “buying your listing” with the hopes of reducing the price at a later date. But that price reduction will have to be significant to attract buyers, and will likely result in a lower sales price than if you price it properly to begin with. Unfortunately, you’re bound to a contract with her by then and as such she’s guaranteed the sale when you do reduce the price.
As for the offer of a reduced commission, I have a lot to say about that point. None of it complimentary.
1. If she’s reducing the buyer agents’ commission, she’s slitting your throat. Offering a reduced commission results in fewer showings. If you’re going to over price your home, you’re going to be desperate for showings. Cutting the agents’ commissions means that you’re less likely to get those rare few showings.
When over pricing a home, you should actually offer out a larger commission. Bribe the agents into showing it, and writing offers. You might get lucky.
But a reduced commission on a home that’s over priced means that the agents have no motivation to show your property; neither a big commission nor value for their clients to make them want to show the house.
2. If she’s willing to cut her commission significantly, what’s she going to use to market and advertise your property? Again, you’ll get less activity because she can’t afford to get your property out there in front of the buying public.
If the Realtors won’t show your home, and the public don’t know about it because of a lack of marketing… where are you going to get a buyer?
Finally, there’s the desperation factor. The promise of a higher price and lower commission are often a sign of an agent who’s desperate to “do a deal”. I don’t know who this agent is, but I’ll bet that if you look at her inventory and recent sales you’re not going to see much. She’s very likely desperate for this sale, and will promise anything for a chance to make a commission. Be very careful who’s negotiating your sale. Are they looking out for your best interests or their own?
One of the reason I have such a high average sale price is not only because of the extensive marketing and advertising that I do, but because I negotiate for my clients’ best interests more than to just put a quick sale together. While I have expenses and need to earn commissions to stay in business, I’m not desperate for the next sale in the hopes of avoiding a foreclosure of my own home or grocery money. Again, know who your agent is working for!
I realize this is a long email, but I hope it’s been helpful in explaining the position you are putting yourself in, either with me or with the other agent. Either way, I wish you the very best of luck and success with the sale of your home. I’m sure that whatever decision you make it will be because you feel it is the right thing to do.
All the best,
John Carle
ReMax Real Estate
www.Knock-Knock.ca
Loading ...
