Agent & Seller Interests, Are They Aligned?

I was speaking to a client yesterday regarding the sale of a property, when they said something that made me think as well as kinda bothered me a bit. I am paraphrasing, but they said something to the effect of, I understand you want to reduce the price as you just want to make the deal regardless, while I as the seller want to maximize the highest possible sale. I understand where they are coming from on the surface, but had to disagree. Obviously, the real estate agent only gets paid when a deal occurs; thus, the incentive is to make the deal. I get that. That being said, I believe both parties interests should be, and with me at least, are aligned. I want to get all my client's the highest possible return on their homes, period! Nothing else makes me happier. In fact, I really don't like having the "we need to reduce the price" conversation with any of my sellers. Sometimes though it is just plain necessary, assuming both parties have the same objective--selling the home! Often, this conversation stems from seller's wanting to list their homes higher than suggested from the start. Unfortunately since real estate exploded into the mainstream consciousness in the past few years, and so much information available, everyone feels like an expert. That coupled with the emotional connection/bias that many have to their homes, and the recent decline in values, always makes pricing a somewhat contentious conversation. It is an accepted fact that if there is no interest from the market, a price reduction to attract a buyer's interest is usually necessery. If nobody is calling for appointments to view the property, either it is not a great product, or more likely the price is too high. Now, if a seller just wants to swing for the proverbial fences and if they get their number great, but if not they are content to stay, this is a different story. In this instance, I would say the objectives may be different. As an agent the profession is to adequately represent and inform their client in order to get the highest amount possible, but at the end of the day get it sold for their client's at an acceptable price. If a seller calls me to sell a property for them, I would think they would want my professional advice, and to sell the property. What good does it do either party to have a listing that doesn't sell?

The bottom line is, at the end of the day in a good faith business transaction, both parties interests should be exactly aligned. We are on the same team and should be working towards the exact same goal.

The Art of Pricing

[flickr size="small" float="left"][/flickr] When placing a property on the market for sale, it is so crucial to come out of the gate with the right price from day one. As a listing lingers on the market for over 30 days, and price reductions must occur, this makes the listing appear stale and as if nobody wants it. But how do you come to the right price? Since every property is essentially different, there is somewhat of an art form to accurately evaluating property values. Depending on the type of property (ie income property, condo, single family home, etc) most will use the standard dollar per sq. ft averages of the recent sales in the immediate area. This is effective to give a starting point; however, one must delve deeper. You have to look at the size of the lot, quality of finishes, perceived value from a buyer's perspective, along with the condition of the market & desirability of the location.

Once, as an agent, I feel I have the right value, then the information has to be clearly expressed to the owner/seller to show them how you came to a particular number. This can be a tricky proposition, as obviously seller's want to maximize their profits, but they also often have a skewed view of the value of their own property. Emotions definitely factor in, and can often overshadow empirical evidence. I do understand the thinking that it is easy to come down, but you can't really go back up; however, again, the longer a property lingers on the market with little to no activity the worse it is perceived by other agents and their clients.

This is why one really needs to come out from the gates with the right amount from day 1. It is imperative!