One question that home sellers often ask is “Why is the suggested listing price from various agents different?” In most instances, there should not be significant differences in what agents suggest your house is worth. Most agents will study what other similar houses in your area have sold for and suggest a selling price for your house. Of course, they will also give due consideration to the unique features of your house.
However, in some cases an agent may suggest a selling price that is very much higher than the price suggested by his or her peers. The reason for this is that a particular agent might be engaging in a practice known as ‘buying a listing.’
There are two possible reasons why this practice of ‘buying a listing’ occurs.
The first reason is that the Realtor feels that the owners strongly believe that their house is worth more than the market research would indicate, and he or she lists the home at the higher price to indicate the desire of the home owner.
The other reason is a little less savory… Even though the agent is reasonably sure that your house will not sell for the higher price, he uses the promise and lure of high prices to commit you to sign a listing agreement. After some time when the house doesn’t sell, the agent will begin talking you down to a lower and more realistic price.
“But where’s the harm? If I don’t get the higher price I can still sell my house for a normal price… right?”
Maybe or maybe not… The problem of over pricing is that other agents might be turned off by it. When an agent tries to sell your home, the first people he or she needs to sell are the other Realtors in your community at the Realtor open house.
If your agent does a good job of showing your home and justifying the value of your property to the other agents, then they in turn will do a good job of bringing your listing to the attention of their clients. But if the other agents do not perceive a correct pricing of your house the first time round, they are very unlikely to waste their time showing your house to their clients. Instead, they will take their clients to other listings that represent fair and good value.
When you finally decide to drop your price to be more reflective of its actual value, your house is no longer a hot commodity. Buyers are usually wary of houses that have sat on the market for an extended period of time. Home buyers will wonder why your house hasn’t sold and will think that there is either something wrong with the listing, or you are having trouble with your sale.
When this happens, you are very likely to receive very poor offers for your house.
You can then decide whether to settle in for the long haul, lower your price even further, or resort to taking your house off the market. Either way you are going to lose a significant amount of time and/or money.
Author Resource:-
Andrew Szalontai is a Langley Realtor who has spent years buying and selling condos and real estate in Langley and Surrey. Visit http://www.mylangleyrealestate.com to get your insider guide to buying and selling property in Langley BC.
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