As a real estate agent, I can tell you first and foremost one of the hardest things about this career is working with sellers who want to sell their home but are in shock or resistant to hearing the value of their home in today's market.
Take this for instance, its 2007 and you purchase a home for $500,000. You love the home and have no regrets. In the back ground, in the years to follow, you hear about what the market is doing but it does not really click. Years later, today for instance, you need to sell and begin to interview agents for the job of selling you home. And an agent you want to hire shows you comparables and gives you the price they advise to list the home.
You are in total shock and think to yourself "Is this a joke", "This is crazy", "There's no way this is true", or "Oh my goodness...what am I going to do".
The value the agent tells you to list is $75,000 lower than what you paid. Yes lower!!! You purchased it for $500,000 and this crazy agent tells you to list it at $425K. The shock turns into denial and you demand to see proof as to why.
Perhaps you are hoping to catch an error or prove the agent wrong.
The agent shows you and you are left in disbelief or denial. After looking at the "proof" you see that your competition is priced so low. And homes being sold are getting 96% of asking on average. WOW.
Yikes...what to do? And how can this be?
Maybe as a seller you want to test the market. So you list the home at $500K with an agent who agrees to this or perhaps you try for sale by owner. Months go by and the initial interest and traffic you had immediately upon listing the home dies down so much you are lucky to get a showing a week. BUT all of a sudden an offer comes in.
Your agent calls you and presents the offer. "I have an offer for you...It is $400K". You are in shock. $400!!!!!
To you, the seller, you are insulted by this "low ball offer". You tell your agent "Reject this offer and lets wait for something better." Your agent tells you to counter but you don't. And next thing you know months go by and your listing expires.
Side note: Often times the first offer is the best.
Does this sound familiar to you? Okay maybe $75,000 is a bit drastic. Lets say you purchased the home 7 years ago and spent $500,000. And the agent tells you to list at $500,000. Does that weaken the blow? Probably not. It probably still won't make sense or seem fair. You may actually think "This agent does not know anything."
This sort of thing happens a lot. Fortunately, many sellers, after the shock, come to the realization it is sometimes better to move on. But some sellers just can't move on with such a loss. Its too tough. Their game plan may be to stand their ground firmly, hope for the best, test the market, try to sell on their own, hire another agent once listing expires and list more aggressively later and so forth.
But when a home does not sell it can make the relationship between client and agent a little tense thanks to the frustration of not selling. There are also other situations where the seller and the agent work together to get the home sold. With price reductions the home becomes more attractive and realistic for buyers as their potential home.
Real estate is tricky. making sense of something that goes against your goals may seem impossible.
Recently someone recently asked another agent what do you say to sellers in this situation where they are having a tough time accepting the cold harsh truth of market value.
This other agent said: Selling a home is a lot like the stock market.
Just like the housing market the stock market changes. And the market does not care what you paid, what you owe or what you need to get to either earn or break even. And the same goes for homes. It's market value!
So yes, being a real estate agent offers us challenges but the challenges that sellers have with accepting the market value of their home does not compare. Sellers must make big decisions and determine their motivation to sell. And as an agent we have to remember our place. To provide sound advice no matter the reaction of our client. Its tough. But has to be done. We can not and should not lead people on. We should only agree, I think, to list homes at values we believe in. We should not list to list. We are not helping the seller. List to sell...that should be the objective.
J. Philip Real Estate is Westchester & Putnam's premier independent brokerage. Founded in 2005, the firm has grown from a single broker to a strong organization of well over 80 associates despite the housing downturn. The team's commitment to results and client advocacy, as well as our focus on technology and innovation, have positioned us as the "go to" brokerage for area buyers and sellers.