What Is It Really Worth?
So what is it really worth... are you getting varied opinions from real estate agents as to what the likely sale price will be?
Who do you believe
If you make a choice of agent based purely on price alone, you could be making a massive mistake, which in the long term, could cost you dearly.
The agents perspective
Let's look at it from the agent's point of view for a second to get a perspective of what goes on. The agents know from history that January and February are typically big listing months for real estate, the holidays are over and everyone who is serious about selling real estate starts to make a move, and a lot of properties hit the market. The same goes for winter and spring. Now obviously all agents want to sign up as much business as they can in this ripe period and each will employ different measures to achieve their targets.
Some agents work on the principal that if your motivation for selling is high, then they will inflate the price enough to impress you, and effectively out bid the other agents, to secure your listing. They then work on you for the next few months hoping they can get it back to a realistic price and then get it sold before their agency agreement expires. This usually results in a low sale price as the property remains on the market for an unusually, and unnecessary, long period of time. Prospective buyers then use this fact against sellers to negotiate a lower price. Ummm actually the agent will do this to you as well!
The buyers mindset
Just put yourself in the buyer's position...they have the mindset that if it's been for sale for three months, you will sell cheap, so they consequently offer you a low price. Some agents will even use this against you to encourage you to accept that low price! This is the most typical scenario of "too high a price resulting in too low a price".
Agents who quote lower prices
Some agents quote lower prices in an attempt to sell the property as quickly as possible, with the least cost to their business. Or they are simply incompetent or in-experienced and do not know the fundamental steps to follow in performing a correct appraisal. Needless to say, quoting a low price is obviously not healthy for your final sale price either.
The law has caught up to them
In most States around Australia agents have to present you with recent comparable sales in your area. This information will typically consist of;
1. Details of the comparable property with photos if available.
2. Date of sale.
3. Final selling price.
The real estate agent should openly inform you "based on the recent comparable sales" where they estimate your eventual sale price to be. It will usually be a range, for example 'in the vicinity of $380,000 -400,000', and they may also recommend you try for a slightly higher asking price initially, to gauge buyer reaction, but this needs to be monitored closely and is totally dependent on the market conditions in your area at the time.
Who's got your back
The long and short of it is simple; you need someone on your side who is prepared to be straight with you, discuss your options and then plan a pricing structure which accommodates your individual needs and desires as well.
By proper prior preparation and research, you will quickly and easily identify the agent you want to look after your money.
If you are currently selling, or about to sell, and would like someone independent sitting on your shoulder observing the goings on, without interfering in the process, drop us a line and see how we can assist. We understand that you might have only dealt with agents once or twice in your lifetime but we do it every day! Contact iREC and see how we can help.