Obviously, selling as many properties as I do each month, I have many, many conversations with sellers about price. Of course, whenever any of us sells real estate, we want to sell for the most money possible to maximize our profits.
In this post, I will be brutally honest. Please don't be offended if this information hits a nerve. I've found after selling hundreds and hundreds of homes, that sellers really want to truth, even though it may sometimes hurt.
Unfortunately, we, as sellers, often struggle to accept the realities of the real estate market. We obviously want to list our properties for the highest amount to ensure we don't "leave anything on the table". Often, however, the market doesn't agree with our perception of our property's value. I'm saying "we" as I write this because even though I know this stuff, I have struggled in the past when selling my own properties; I want to get the most money possible, as we all do... but the reality is that the market will only pay what a property is worth.
And often the price seller expects for his/her home is more than the market says the home is worth. Even though the market may give all indications that a specific property is worth, say $350,000, it's not uncommon for a seller to want to ask $400,000... or even $450,000.
Even though there's plenty of market data to indicate that $350,000 is the "right" price and clearly indicates that $400,000 is way too high, would-be sellers often then try to justify why their home is "different". They try to justify that extra $50,000 by saying things like "our house is nicer than the others", "we have a nicer backyard", "we just painted the entire inside", "the other homes were 'given' away", etc.
And, as we know, some sellers want to price their home based on how much they "need" for their next purchase or, more commonly how much they "owe" on their current loan(s). They're hoping that a buyer will willingly pay an extra $50,000 for their home, for example, because they (the sellers) need the money for their next purchase or because they owe so much on the loan(s). Of course, when thinking about that for a moment, it defies common sense.
So, to help sellers understand "market value", I learned many years ago to liken the real estate market to the stock market.
For example, let's say I bought Starbucks stock a few years ago for $80 per share. And let's say I want to sell it today, but the price is down to $65 per share. How much can I get for the stock? Can I get what I paid for it a few years ago - $80? Nope! Can I sell it for $75 per share because I REALLY NEED the money to buy another stock? Nope! Can I sell is for $68 per share just to minimize my loss? Nope! It's selling today for $65 per share and that's ALL I can get for it. That's what it's worth and that's how much I can sell it for. And there's nothing I can do to get me any more than $65 per share.
Now... I could consider waiting, and maybe the price will rise. But, then again, it could also drop.
Bottom line: Market value is market value... PERIOD! The market, whether it be the stock market or the real estate market, may not be kind, but it is never wrong. And if we try and "argue" with the market, we'll lose.
If you have questions about selling your home, please call me at 916-241-8000 or 530-677-1332.