Wednesday, 27th of June 2012 at 05:06:50 PMWhen a potential Phoenix Seller calls me and says they want to sell their home, this triggers a change of events beyond the scheduling of an appointment. I’m researching the value of the home compared to other local homes that recently sold. I’m looking at Automated Value sites like Zillow, Trulia and RPR to gain insight into what buyers will see and think.
After I do the research, I start to create information for the seller/owner to review and decide what to price the property at. Yes, I said seller, you know the owner, they set the price, I take a bunch of data and convert it into information that they can use to determine the best sale price.
I’m also taking it a little further, taking a role of the Las Vegas bookie, determining odds of sale. I make a chart based on potential sales price that answers questions like:
- Odds it will sell at this price.
- How long will it take to sell (Days on Market).
- How much will marketing and advertising cost me.
- What will the likely final sale price be.
This last one throws other agents and owners for a loop. Let me explain with a couple of stories. Let’s say I determine your home to be worth $200,000 and you choose to list it for $180,000 (10% discount), I may determine you will get lots of offers and it will sell at $210,000 (5% above my estimated market value). This is what I call the eBay effect, we get several buyers emotionally involved and they push the market higher.
On the other hand, if I say the value is $200,000 and you try to list at $240,000, after all we’re in a great market and things will go really well (as some agents will have you believe just to get you to list with them). My research tells me it will take a long time to sell, my advertising will be high and you will probably sell around $190,000 (after being on the market for 90 days).
Now, add to this, my fees for the first case will be lower than the second case. Why? Because my time will be less, my marketing costs will be less, the odds are higher (lower risk) and since it will save me money, I will save you money on my fees. On the other hand, my fees for the second case are higher (if I agree to take the listing), because my risk of not getting paid are pretty high, my time will be high on the project (I do want to make more money than minimum wage), and my advertising costs will be pretty high trying to find the one buyer that is willing to buy your home.
Just some food for thought when you call me to list your home.
