Want to Sell Your House? Price it Right!

Daytona Beach Area Real Estate Market, Data and Updates. By Lisa Hill, "THE SMART CHOICE!"

As a REALTOR®, I frequently have the unpleasant job of having to provide information to real estate buyers and/or sellers that is not what they want to hear. It seems that lately I've had this happen more than usual. Now I admit, I work primarily with real estate sellers. And of course I work with the buyers for my listings. I find these buyers through my marketing plan. But I don't generally work as a buyer's agent. Although, Florida law now instructs all real estate buyers and sellers to automatically assume that the agent they contact is operating as a Transaction Broker, unless the agent indicates otherwise. So Florida law allows for real estate agents to transition between real estate buyers and sellers with ease.

In the last couple of weeks, I've had a couple of listing appointments for houses owned by potential real estate sellers who want way too much money for their houses... in other words, listings I don't want in my inventory. I've turned down these listings.

Before I continue, I feel this must be said...

• When a real estate professional does a CMA (Current Market Analysis), it's strictly professional. It's why REALTORS® serve a purpose. We're not emotional about the transaction, whereas buyers and sellers are usually pretty emotional about their "home". I bring this up because of a comment that was recently made on one of my listing appointments. After being presented with the facts (recent sales data), the home owners said "We're getting screwed". (Yes, one actually said that.) You can't be getting "screwed" (so eloquent) when it's just the current market value. You're being given facts... data... numbers. How can you take that personally? And real estate is cyclical. It always has been, and always will be. We have no control over the current market value. A REALTORS'® job is to facilitate the transaction by keeping it strictly business, and lessening the emotions. It's the only way to get the best "deal" for both parties. This brings me to my next point.
• How is it that home owner(s) can reject the factual evidence of value, and start listing everything they've done to the house since the day they bought it... as if the other recent sales didn't have the same, or similar maintenance over the years. But let's proceed with addressing the way to properly price real estate in todays' buyers' market.

Now for the way I prepare for a listing appointment

It's impossible to provide an accurate market analysis for a house, condo, or townhouse without actually seeing the property with my own eyes. But I can get the basic data prepared by looking at what's currently on the market (most are priced too high), and checking what has recently sold (sales are the accurate depiction of the true market value for a particular property).

Once I've done my research (which usually takes a couple of hours, during which time I don't know if I'll even want the listing yet), I then meet with the potential sellers. Upon meeting the sellers, I first have them give me a full tour of the potential listing, and tell me about any upgrades they've made. When the tour is completed and I've documented all the details, I then present the home owner(s) with the recent sales that are comparable to their property, and are located either within the same subdivision, or within a 2 mile radius (keeping the process as similar as possible to the way an appraiser would work). Last but not least, we fine tune the additions and subtractions, based on the condition, location, and amenities of the subject property in relation to the comparable sales and the upgrades, or lack thereof. (Asking prices of active listings are mostly irrelevant, except to be sure the new listing is properly priced.)

But after all that, we're still not finished. Properly pricing a property for sale requires more than just facts and figures. It even requires more than comparing the subject property (potential listing) to the recently sold listings. And it even goes beyond the condition of the property. There are actually several more conditions to consider. But for the purposes of this blog post, we'll only address one more step, which is; determining the sellers' motivation level. If the seller(s) need to move fast, then obviously, they'll want to price their house/condo/townhouse below the competition so it will sell as quickly as possible. If the sellers are not in a big hurry, the listing still needs to be priced competitively (since we're still in a buyers' market), but it doesn't need to be at a rock bottom price (other special factors not withstanding). *Side note: Viewing the property, determining need, considering location, observing the condition, discussing all options, etc., takes another couple of hours during which time I/we still haven't decided if I'm going to list the property.

To go back to my recent listing appointment, I provided them with a range for what they could expect as their sale price. But these sellers wanted to net about $75,000 more than the market value of their home. It was a listing I could not sell, so I wasn't willing to list it. There were no comps to show a higher value, and even with a complete overhaul, the property would not be worth anything close to what the home owners wanted to net. That particular neighborhood just will not draw a price that high. If a potential buyer could pay what these sellers wanted, the buyer could find a nicer house, AND a nicer neighborhood. It's not an insult to this house or neighborhood. These are just the facts... the numbers... the data. Remember? Your REALTOR® is there to provide you with this information, and facilitate the transaction by lessening the emotion. This helps both parties get a better "deal" by keeping communication open.

Lastly, this is something all real estate sellers need to know. In the last couple of years, about 99% of all buyers I've worked with, have only been interested in getting the best house for the cheapest price. Nobody can afford to overpay. And the banks won't finance a property that THEY feel is over-valued. And until the market has completely stabilized, this will continue to be a legitimate concern for the banks and the real estate buyers. This is why over the last couple of years, when I have been able to get my buyers to take a look at an average priced property, they wouldn't even consider making an offer unless the seller(s) were willing to drastically reduce their asking price. Real estate buyers have not been willing to settle for anything less... or should I say, they won't settle for anything more?

So I'll finish this post the way I titled it. If you want to sell your house, price it right! When a professional REALTOR® presents you with factual data that indicates a lower value for your property, it's not personal. As a REALTOR®, I only get paid when I actually close on a transaction. I really want to sell your house. And it's my job to know the real estate climate, and to be honest with my potential clients. To do otherwise would not only be a disservice to you, it's also a violation of the REALTOR® Code of Ethics. So if you want to sell your house, make sure you work with a REALTOR® you can trust, and try not to take the data personally. They're probably doing their best to give you accurate information.

I just sold one of my listings. So if you need a REALTOR® with the knowledge and resources to sell your house, condo, townhouse, or vacant land, and would like a free market analysis, make a Smart Choice and contact Lisa Hill with Adams Cameron & Co., REALTORS®.

View Daytona Beach area MLS listings here.