Do You Want to List Your property or Sell it?
If a seller places their property for sale on the market they absolutely want to sell.
Hiring a realtor, putting out the "for sale" sign, placing a "multiple listing service" entry, requesting that the agent do serious advertising and expecting the agent to schedule open houses all are part of placing a home on the market.
All of the above activities indicate the owner wants to sell the property. Now comes the Catch 22. The seller "must" have a certain price for their property. The individual reasons for selling a property are as diverse as the number of fish in the sea. A few of the more common reasons properties come to the market are downsizing, rightsizing, upgrading, moving to a new location, job transfer, inheriting an estate property, death of a spouse, birth of children, new job, retirement and moving a parent to assisted living.
A leading national real estate site also has a "make me move" section of properties where the owner can place any value on the property and wait to see if a buyer will pay that price. Needless to say this section of properties remains the same year in and year out as the owner waits to win the lottery of real estate.
Motivation to sell a property can range from the "lottery" example above to the urgent need to decrease the cost of living related to loss of a job. The most important factor that isn't represented in any of the information above is the buyer.
A buyer is interested in paying a fair price in a market where the choices are many. Buyers also are looking for value. Value is both objective and subjective at the same time. A good comparative market analysis can give the seller the objective value of a property. A realtor is not needed to obtain the subjective value of a property. A friend or family member can give the seller their opinion of the subjective value of the property (of course the friend or family member will not be buying the property).
Bankers who provide loans to buyers do so based solely on objective value. Apart from flippers and investors, approximately 90 percent of home buyers will obtain a mortgage and the property they make an offer on will be subject to an appraisal by a licensed appraiser. So a buyer may feel that the property is worth the price they offer (subjective) while the bank could still decline the loan based on appraised value (objective).
Properties can become "holding listings" when this happens. The seller ends up "holding" the property because the reality of appraised value does not match the need for obtaining the subjective value the seller desires. No amount of subjective need for a "price" will overcome the objective market value of a property.
When the seller's genuine goal is to sell the property the key is knowing what the objective value is. Your realtor should always provide you with a printed Competitive Market Analysis showing all homes listed, sold, cancelled or expired unsold in your local area. Pay particular attention to the "sold" homes to find a range that will sell your property in a reasonable amount of time.
If your desire is to list your property and you don't care what the objective market value is or whether or not your property actually sells then you owe it to your realtor to share this fact. Your realtor will spend their time, their money and effort on the marketing your property. Enter into the relationship with your realtor trusting that if you price your home based on a subjective value the realtor, even with a valiant effort, cannot overcome the objective market value and your property will probably not sell if the difference between objective and subjective value is too great.
Ask yourself "do I want to list this property or do I want to SELL it?"
Paul Harsch, president and founder of Harsch Associates, a Berkshire County based real estate brokerage firm, is a licensed real estate broker in Massachusetts, New York and Vermont, serving a diverse residential, business, commercial and land client base for 40 years.