I’m a Realtor: This Is the Hardest Truth To Get Selling Clients To Understand
Written by
Laura Bogart
Edited by
Kristen Mae
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
In one of the more famous moments in the modern classic “Jerry Maguire,” the titular character (Tom Cruise), an elite sports agent, is coaching his star client — well, at this point in the movie, his only client — about how to get the best deal for a pre-season contract. “I am out here for you. You don’t know what it’s like to be me out here for you,” he says, exasperated. In his final plea for the aspiring football star to be a little more camera-friendly, he delivers the famous line: “Help me, help you.”
It’s a sentiment many realtors likely relate to. They want their clients to “Help me help you” by taking their advice about selling or understanding the hard truths about selling any home — let alone their home — in this market. That often comes down to pricing.
Don’t Let Emotion Cloud Your Judgment About Pricing
Your realtor understands that your home is filled with memories that you find priceless, from that dinner party where you realized you might be in love with your best friend to that summer afternoon in the backyard when your baby walked for the first time. However, it’s your realtor’s job to find a price for your home.
They have to look at the cold, hard realities of the market and help you develop a price that will actually inspire a prospective buyer. Glenn S. Phillips, CEO of Lake Homes Realty and Beach Homes Realty, gets the impulse. He even points to the studies that have shown people value their own property more than someone else’s. While Phillips acknowledges that homeowners feel more emotionally attached to their home and often see it as more valuable, that doesn’t always translate to the market.
“This has nothing at all to do with the market value. Homeowners should think of their property like a stock or bond where the market is the market,” he said. “For a home or a stock, set a sellable price reflective of the buyer’s current market behavior. Period.”
Listen to Your Realtor About Pricing Strategy
Phillips wants sellers to understand that they’re competing for the attention of buyers who are better informed than ever before. When everything a buyer could want to know about the market is available online, they are prepared to avoid overpaying. This is why you have to trust your realtor’s knowledge of the market when pricing.
He shared that data from around the country showed that buyers find listings that are overpriced by 10% or more unreasonable to consider. If they find a property unreasonable, they won’t waste their time on showings.
“Our data also shows that if a home has been on the market for more than 60 days, the value of the home in the market degrades, and minor price cuts will fail to garner any new interest,” he said. “The home is now stale.”
You Have To Avoid the Pricing “Death Spiral”
One of the reasons a savvy realtor is cautious about finding the right price, right away, is that overpricing from the jump can leave your home on the market for too long. The first two weeks are crucial for getting prospective buyers interested in your home. If your price is so high that it alienates buyers in that key window, you might end up having to make price cuts anyway — while simultaneously training other realtors and buyers to think that you’re desperate enough to accept a lowball offer.
Phillips said that if a seller makes four or more shallow price cuts, they’ve gotten buyers to accept that they might be open to an even lower offer.
“Homes that are overpriced and fail to get realistic quickly create a pricing death spiral that never catches a falling market,” he added. “Small price cuts leave the home ‘a day late and a dollar short’ so to speak. Even worse for the seller, buyers are watching online.”
More From GOBankingRates
