“We hear what you're saying but we NEED to list at our price. We have FAITH in you...besides if we get the price we NEED, you make more money. Isn't that what you WANT?”
I am always dumbstruck by that logic coming from an otherwise intelligent seller.
I have just finished explaining that you have a 90 day window to sell your home. A 90 day window in a market averaging 10 months supply of available homes at the end of 2009. The qualification period for the government tax credits, love 'em or hate 
'em, will end in 90 days. Over. Not coming back. You NEED to have your home under contract by then and the supply of housing in this area is more than triple that.
I have explained that every single day agents all over the Triangle are hitting the SUBMIT button on another new listing.
It's the third week of January 2010 and there are over 700 new listings in the last seven days alone in Wake, Durham, Orange and Chatham counties.
Another new listing which has been freshly painted, decluttered and staged for sale. Another new listing that opens the possibility of owning a great home for a qualified buyer who WANTS a deal...a great deal. And why shouldn't s/he? It's a buyers market and this buyer either has nothing to sell in order to buy because s/he is a first timer or was wise enough to take the advise of a real estate professional and get their previous home perfectly positioned to be at the top of another buyer's wish list. Done. Gone. Cash in the bank.
I have explained that you purchased your home at the top of the market. I know you were excited to move into this wonderful home and with such a great mortgage that you barely had to touch your savings. In a few years, when your house had appreciated normally (not those crazy appreciation rates we heard about in Florida or Nevada) but 'normally' at 5-6% a year (excuse me while I pause to reflect on how many times over the last 30 years I have said that the real“normal” in my book was 1-2% per year) you would be able to “break even” in a year or two, sell your home at a modest profit, pocket the difference as your next down payment and move on to do it all over again in another town. Well, that WAS the plan, wasn't it?
I have explained that the pool of potential buyers for your home is limited by several things beyond your control. First, they must have a job. Second, they must have some savings. Third, they must have good credit, not OK credit, good credit. They must be able to get an interest rate that allows them to afford the payments on your home. Those interest rates are available at least through March. But once the government stops buying mortgage backed securities (in March) they will have to get that loan from a bank. I think it is clear that banks have no intention of loaning money to home buyers at the current rates of under 5%. It isn't rocket science that rates are going to go up. An interest rate rise of just 1% will mean a potential buyer for your home must pay $10,000 less for it in order to have the same mortgage payment.
Which brings me to the other thing we just talked about: Sellers care about Price but Buyers care about Cost! Remember back a couple of years ago when you were the buyer? Did you care what you paid for the house or did you care how much your mortgage would cost you every month?
So I guess the answer to your question is: Thanks. I appreciate your faith in me but really, shouldn't faith be reserved for things which cannot be proven? I'd prefer you simply trust me and my actual facts. I have absolutely no special skills which allow me to unerringly locate the one buyer out there who has cash, no television or internet access allowing them to find out that this is a buyers market, no real estate professional working for them and who WANTS your home so much they will pay whatever you NEED.
As for my commission? I make no commission on a home that does not sell. I create no good will by making a promise on which I cannot deliver. I have yet to list a home on which the commission I made would allow me to retire with no worries about the future. I don't expect to ever list one.
I expect to work hard, offering my hard earned wisdom to my clients and to rely on their appreciation of my skills and services so that they feel good about referring me to their friends. It's a good business plan. I do what I have done for over 30 years because I love it, I'm good at it and I can make a profit at it. In that order. So can we rephrase the question?
I have FAITH that after you have processed all of the information I have provided, you will understand that if you NEED to sell your home and are not one of the millions doing so in distress, you will WANT to make it as attractive as you can, both in price and condition, to the well informed and qualified buyers out there. If you do that I can predict that you will move forward as one of them yourself...a well informed and qualified buyer...now that's a good business plan!
It's Simple...When You Have A Great Agent!
SarahGray Lamm is a licensed, full time, residential real estate professional in the Raleigh Durham area of North Carolina with over 60,000 hours of experience. She specializes in serving the real estate needs of home sellers, home buyers and investors in Chapel Hill, Carrboro, Durham and Northern Chatham County and is proudly associated with Allen Tate Realtors, the Carolinas #1 independent realty company.
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Great post....as usual. Isn't it funny sometimes that sellers think we have control over whether a buyer buys? Of course we want them to get the best price we can. But it also has to appraise and needs to be realistic.
SarahGray: You and I seem to be hammering away at a very similar point ... buyers and sellers becoming educated and realistic ... The "realistic" part seems to be the key to so many things.
As for commission ... whether realtor or lender, our commission/paychecks depends on whether we get the transaction closed. I am always so bewildered by those that think that we somehow gain something ... or are able to pay our own bills ... if we are not successful or capable of producing that. No one wins if a closing does not occur ... so are we not going to give our customers and referral partners the most reliable advice, factual and intelligent answers, direct, professional opinions and stellar service we can to accomplish that? I suppose that this topic is another whole group of blogs, isn't it?
But back to the main focus of your article ... being realistic. How exactly do we get the message through that that is imperative to secure a sale and/or move a transaction forward? I truly am frustrated with my "batting average" on this. We can all write here and agree on this matter ... but how do we actually accomplish it? That's what I would love to discuss and hear about ...
Great food for thought and discussion, SarahGray! You're a true voice of reason ...
Gene
SarahGray I have always said price sells more than any agent. The top producer in the country can't sell an overpriced home. I don't care what type of marketing or connections you have.
Karen, so right! It's also amazing how some sellers think we would rather price a home out of greed over what amounts to maybe a couple of hundred dollars in my paycheck when it is all said and done than to do a great job, save them several months and thousands of dollars in mortgage payments and have them so pleased we get a referral out of it!
Gene, I hear you! One of these days folks will realize that simply insisting that things should work the way they used to does not make it so and nothing beats excellent advice and counsel! Some pills are bitter to swallow indeed but they will feel SO much better after they have taken it! Did you read Bill Gassett's featured post today? Not to be missed...on this same topic. Personally, I have decided to stop wondering what I can do to force folks to open their eyes. I'll work with my referral base for whom trust is not an issue and be careful not to say "I told you so" to others when it turns out that the second half of 2010 grinds to a complete halt in housing because everyone thought they knew better than us!
John, absolutely...I may be good but nobody is THAT good! ;-)
SarahGray - 'Sellers care about Price but Buyers care about Cost!'
They do both. You end up on the side of who is signed in the bottom line and what is ethical . As like you are, my clients come first. great post
Unfortunately there will always be folks who just won't listen to good advice!