SUMMER DAYS DRIFTING AWAY
Sellers tend to learn the hard way.
That’s the message of a piece in today’s New York Times, which chronicles the bad decisions that some sellers made when they listed their homes.
Among a few anecdotes, the newspaper quotes a couple who ignored their broker’s advice to ask no more than the prices of houses near their 4,000-sf place in suburban Houston:
You’re emotionally attached, so you think your home is worth more. I had a landscape service and a Sub-Zero refrigerator and an icemaker on every floor, but buyers don’t care, they want deals.
Listed originally for $825,000, the house being sold by Michel and Rick Shanks underwent four price reductions and eventually sold for $605,000 after 10 months on the market.
The newspaper gives some fairly good advice on deciding what a property might be worth to buyers, and the article is worth reading. But the Times doesn’t give adequate disclaimers about the sources it recommends–for example, Zillow.com, which does not take into consideration the condition of the sold properties.
A crucial point is the necessity of taking into consideration the timing of sales in a dynamic market. Data on sales that closed even two or three months earlier can be fatal. Nosing out amounts on contracts just signed is far more useful, as one New York super-broker recently recommended in remarks that turned out to be controversial in her profession.
Trading on friendships and using their experience in seeing hundreds of properties a year, brokers often can obtain or infer contract prices, invaluable information when marketing a house or apartment.
Self-interested as I may be, I also take issue with a statement from Karl E. Case, whose name represents half of the Case-Shiller indices. Said he:
The Realtor has the incentive to start high to get a bigger commission, so if you are not in a rush to sell and can accept having to lower your price later, then go with the Realtor’s price.
Is he kidding?
Case may be a good economist, but does he really think that the extra few dollars that a broker can get from a higher price (figure 1-2 percent on average for the individual) causes the broker to highball the figure? Or that many brokers would rather sell quicker than higher.
That’s nonsense. More to the point is that some brokers like to “buy” a listing. That is, they will fill a homeowner with false hopes that an unrealistically high price is obtainable, only to recommend a discount down the road. They adopt that unethical tactic just to get the listing in a competitive situation.
And as everyone knows, a property that lingers on the market lingers even longer on the market because it is perceived as stale, attracting bids that are ever lower.
So read the Times, but caveat emptor. If I remembered enough Latin to say “seller beware” in that dead language, I would. Forgive me.
Please note: You won’t find any previously unpublished posts during my blog’s annual August hiatus, but I hope you’ll enjoy reading some of my favorite ones. Although I’m not publishing new posts right now, I am continuing to assist buyers and sellers with their needs. Feel free to be in touch, and I hope you enjoy the last few weeks of summer.
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022