Value vs. Selling Price

Setting a property's selling price is not an exact science. In fact, depending upon circumstances, it can be far more subjective than scientific. I've see examples of real estate agents advising unsuspecting sellers to list their home for less than its true worth, or to take a deal for less money than someone else might have ultimately offered - just to make a quick sale. Why would they do this?

The short answer is money. In most cases, real estate agents do not get paid until a deal closes - after money and title are exchanged. So, their thinking would be: the lower the price, the quicker the sale, and the quicker they will get a paycheck. While this sort of attitude lacks integrity, it also speaks to another possibility: they might not understand value, and how to use effective marketing to increase perceived value, which is the price a buyer is usually willing to pay for a property.

To illustrate... Let's say your home is listed for sale at $500,000. After a few months an offer comes in for $450,000. Even though you and your agent had previously agreed the property is worth every bit of the $500,000 asking price, your agent now tries to convince you to take the offer.

Remember, the agent only gets paid if a deal closes, and while the $50,000 difference between the asking price and the offered price is a lot of money to you, the agent would only be sacrificing a small part of his or her commission - $1,500 of a potential $15,000 commission, which isn't very much when compared to not getting paid at all. ($15,000 at the $500,000 price vs. $13,500 at the $450,000 price = a $1,500 difference, assuming a 3% commission - which isn't guaranteed.  The amount sacrificed by the agent would be even less if the commission rate were lower.)

An agent with a better understanding of marketing and its value building function might have used a different approach. Many mistakenly believe that marketing is just another name for advertising. Not true. And, good advertising doesn't just happen, it is a byproduct of good marketing strategy.

We are dedicated to the effective use of marketing to build a property's perceived value in the marketplace, and have the knowledge and marketing expertise to design effective strategies around this important concept. This is how we get top dollar for sellers, which is what we always strive to do.