Selling a home in California’s East Bay communities is no longer just a matter of putting a sign in the yard and listing the home on the Contra Costa or Alameda county MLS. Selling a home today in Danville or San Ramon and getting top-dollar for the client can be just as challenging as selling a home in Concord, Antioch and Brentwood.
Being a real estate agent, I am certainly biased toward home sellers using an agent, but that is not my only bias in the matter. I am also a marketer, To be more specific, I am an Internet Marketing and Promotion expert.
In my opinion, it is good marketing that is key to getting a home sold in a timely fashion in today’s challenging real estate market. While pricing the home right is an important factor, it is not the only factor.
It doesn’t take a Ph.D. to know that setting the price at a “fire sale” level, the home is going to move quickly and require little investment of time or money on the part of the real estate agent or the homeowner. It’s sad to say that there are unexperienced Realtors with little or no marketing experience that rely primarily on two things to get their listings sold – low price and the MLS.
Price is important, but to price a home right requires:
- Knowing the local real estate market
- Skill at determining comparable values
- Depth of experience with changing market trends
When considering setting a price on a home, two prices have to be considered:
- Utility Price
- Market Price
Utility price is the emotionally vested price that refelcts the value of the house to the owner. The owner may have lived in the home 30 years and raised 3 children there. The house has met the needs of the family for many years and has many emotionally charged memories associated with it.
Another scenario more suited to today’s real estate market dynamics is the homeowner who is losing money on the transaction. I don’t mean loss of appreciated value. I mean their downpayment or more through a short sale process.
The market value of a home is what a buyer is willing to pay for the property. In the end market value is determined by utility value, not by the seller’s utility value, but by the buyer’s utility value.
An experienced Realtor knows how to use this knowledge to the seller’s advantage. If the asking price can be set at a level to attract traffic and generate multiple offers, the market price can move up toward the owner’s utility price. Like it did in a recent transaction of ours that involved six offers, that resulted in two competing buyers, that moved the original offer prices up more than $40K.
Market conditions do not determine whether houses sell. Houses sell in all markets. The questions are:
What is the seller’s motivation- Why is their house not selling?
It could all be about price and unrealistic expectations. It could also be all about inexperience and ignorance.
2 Comments
John,
Nice article although your first paragraph could lead the consumer into thinking that all real estate professionals did to market homes in the past was list them, put them on the MLS and wait for offers.
Thanks for pointing out that experienced agents can successfully market and sell homes under any market conditions because we have the skills, knowledge and experience neccessary to do so.
Dave – Thanks for the comment. It was not my intention to label all Realtors as “sign hangers” – even in the heyday of the boom. AS you so rightly point out – professional Realtors work the business.
We and the public are fortunate to have so many skilled professionals in the industry. Due diligence is always recommended and encouraged to weed out the profiteers.
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