I thought that this was an interesting (and good) blog, but I had to leave with the answer - particularly after reading the comments left by other readers - What about presentation?
Recently (and frequently) we had the occassion where sellers changed agents after no offers and 8 months of DOM. The new agent staged the home prior to relisting it, increased the price and it was SOLD in 78 days. In that 78 day time frame they also had an offer they turned down, another offer that didn't work out and several other 2nd showings.....
PRICE IS NOT KING - it's only part of the court.... appearance, packaging and marketing are just as much a part of the equation. Agents, when you are just going on price alone, you are leaving too much money on the table!! This isn't your money either - it belongs to your clients!
Today, I found 228 homes in Washington D.C. and Northern Virginia that have been listed on the MLS and on the market for more than 365 days. An entire year or more on the market! 29 of those homes have been actively on the market for over 2 years! Can you imagine? Two years of keeping your home clean, having a lockbox on the door, and leaving the house on Sundays so a REALTOR can hold an open house!
That is a very long time even in today's slower market.
While 86 of these homes are over $1 million (which you might expect to be on the market a bit longer anyway), over 60% of these long-time listings are under that price.
How do this compare to the average time for sale? Well, of the 1,847 homes that have sold so far this year in D.C. and Northern Virginia, the average days on market was 53.
WARNING: You Don't Want Your Home on the Market Forever!
One of the first questions buyers ask is "How Long Has That Home Been on the Market?" More often than not, buyers will use this information to determine how much they wish to offer for the home. That is, if the buyer even makes an offer at all. The longer a home has been on the market, the less chance it will get an offer from buyers because they will often think something is wrong with the house that's been on the market for so long. In reality, the only thing wrong with the home may be the price!
If when checking out these homes, I notice that there have been no price reductions or very small price reductions, it becomes obvious to me that the sellers are not very motivated and unlikely to negotiate. Chances are there were some offers for the property early on, but that the sellers refused to lower their price to get the deal done and the house sold.
When working as a listing agent representing the seller of a home, I do not want my seller's home on the market for more than a year with no price reductions. We'll often agree upfront to scheduled price reductions after set periods of time without an offer to get the home sold. The better strategy is to just price it right at the beginning.
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Melissa Marro, a published artist, now turned staging advocate and national speaker speaks her mind about real estate and the home staging industry. In her 'no holds barred' approach, audience members find real answers to the industries pitfalls and learn how to overcome them with tried and true information and guidance. With marketing as her passion, she turned a small home based business into one of the nation's largest home staging and training facilities. Selling her successful home staging company in January 2012, Marro is now a full time speaker and instructor for Staging And Resign and Real Estate Staging Association (RESA)'s trade events.
For more information on having Marro speak at one of your real estate functions, please contact her at 843.619.1593 or email at marro.melissa@gmail.com
Why are so many agents missing this key component of presentation? The buyers of our last rehabbed property were willing to pay $20K more for our home than the comp they were considering purchasing basically because it was painted and staged.
Melissa: I love "This isn't your money either - it belongs to your clients!" I'm convinced that because homes basically sold themselves for SO LONG, some Real Estate Pro's have forgotten that it takes MORE than price, (like a bit of elbow grease and few dollars), to sell in a NORMAL market!
Agents are taught that price overcomes all objections...which is true BUT it can make the seller leave money on the table. Often they could spend $2000 or less on staging but their ROI for it can be thousands of dollars more. Case in point is my recent listing on Cypress View listed with another agent for less money. After the staging was complete and landscaping done, we increased the price and the property sold in 80 days after being on the market with another agent for almost a year.
Fact of the matter is buyers want something move in ready. Condition/presentation is a must in today's market along with the right price!
Melissa- I read the post and had the same thoughts. Thanks for sharing with all of us. Some Realtors get it but there are still Sellers and some Realtors who would rather play the Price Reduction game. Yes, all the Staging in the world may not help sell an overpriced house. But by the same token, you can keep reducing all you want but if it doesn't appeal to buyers; if it is in need of repairs, updating, paint, etc.; if the competition shows better and won't require the Buyer spending thousands just to move in, then it doesn't mean anything.
Melissa.
The old line "price is king" really irks me. For me "value for money" is king. As someone who's bought and sold proeprty in the past, price might get me to view the home, but once I'm through the front door, it's absolutely essential to me that I can see value for money via condition and presentation.
I'm not a house flipper (and few buyers are), so price is not all that motivates me to buy. I'm not interested in buying a property that's in poor conditon or that presents poorly, from a seller who appears not to care what I think, as much as they should.
If I don't see the property as a good buy, then I'll simply say 'good-bye'.
Thanks for bringing this up. Great post.
Donna
Melissa,
I agree with you - price is NOT king! Price is but one leg of a three-legged stool - price, location, and condition. If any one of them is wrong, the stool wobbles or falls.
If price were king, there would be absolutely no need for buyers to see photos or even visit a property. They would just purchase by number.
~ Lin
This has irked me for years (even when working as a realtor) that agents believe that the price should be reduced until it sells.
It's not the realtors money at stake it's the sellers money. It's easy fora realtor to say' lower the price $30K' because that's only $900+- in his pocket.
August 2008 I wrote the Blog about Fiduciary responsibility of the realtor. Maybe it's time to run it again
I do always think there are 3 "P's".......Presentation (staging)....Pricing (set by the seller) and Promotion (the agents job to promote the property!). When you address all 3....the home will SELL and for top dollar!
GREAT post!!! THANKS!!
Agents, when you are just going on price alone, you are leaving too much money on the table!! This isn't your money either - it belongs to your clients!
You tell 'em Melissa! Great posts by you and Brian.
The top agents in my demographic realize that since they cannot control size or location, presentation needs to be top notch.
Oh boy.. This sure hits home. I have a staged vacant property that has been on the market for over a year!.. I know the owners blew off an all cash offer shortly after it was staged because it was "too low".. OOPS!
When a buyer asks the dreaded question.. " How long has it been on the market?" and the answer comes back, what is the first hing that pops into their head????.. uhuh,,, exactly...
I agree with your comments and the comments above.
However, I discovered that our agents can arrange for the listing date to be more current than it really is. Not all agents show listing dates in their details: the ones that do can alter the actual listing date to one of their choice. So who really knows exactly how long a property has been on the market except the sellers and neighbours?