Comments on: Perceived Value of Real Estate Services http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/ Austin Real Estate Blog Fri, 19 Mar 2010 19:01:16 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Cincinnati Real Estate Blog - Amy Broghamer » Blog Archive » Perils of Overpricing Your Home http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-345 Cincinnati Real Estate Blog - Amy Broghamer » Blog Archive » Perils of Overpricing Your Home Mon, 29 Jan 2007 00:20:07 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-345 [...] Overpricing will not benefit anyone in the transaction, least of all the seller. I recently read a similar article on the Austin Real Estate Blog that tests my theory, and along with it, will share an example in Austin, TX of your likely next thought, “If my home sells in one day or one week, was it priced too low?” Look at it from the perspective of one of my colleagues and fellow CRS Realtors in Austin TX here. [...] [...] Overpricing will not benefit anyone in the transaction, least of all the seller. I recently read a similar article on the Austin Real Estate Blog that tests my theory, and along with it, will share an example in Austin, TX of your likely next thought, “If my home sells in one day or one week, was it priced too low?” Look at it from the perspective of one of my colleagues and fellow CRS Realtors in Austin TX here. [...]

]]> By: Steve Crossland http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-344 Steve Crossland Sat, 30 Sep 2006 01:30:57 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-344 You make the point very will Rick. Steve You make the point very will Rick.
Steve

]]> By: Rick http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-343 Rick Fri, 29 Sep 2006 23:09:31 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-343 > That's the problem Nis. A good realtor can more than earn his commission with a simple 2 minute advice, while a bad realtor can cost you more. What do you value someone's experience? If they can get more money in your pocket, sometimes it's worth to pay them more commission. Unfortunately, that part of the job is hard to notice. People can easily value manual labor and crap they buy in stores, but they don't value professional opinion. If it takes a few minutes to give, than it must not be worth much. That's why so many think realtors don't do much because their job often entails giving advice, which is quick to give but takes a long time to learn. >

That’s the problem Nis. A good realtor can more than earn his commission with a simple 2 minute advice, while a bad realtor can cost you more. What do you value someone’s experience? If they can get more money in your pocket, sometimes it’s worth to pay them more commission. Unfortunately, that part of the job is hard to notice. People can easily value manual labor and crap they buy in stores, but they don’t value professional opinion. If it takes a few minutes to give, than it must not be worth much. That’s why so many think realtors don’t do much because their job often entails giving advice, which is quick to give but takes a long time to learn.

]]> By: Nis http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-342 Nis Fri, 29 Sep 2006 19:47:05 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-342 I do agree that professional services are much more helpful. But the fact remains that the home would have sold much earlier and for much more had the seller accepted the 450 k offer in the first place. The only fault of the discount broker was that she refused to give her personal opinion. What would you rather have- 30k more (450 k minus the selling price of 420 k) or a piece of advice? I would prefer 30 k anyday. I do agree that professional services are much more helpful.

But the fact remains that the home would have sold much earlier and for much more had the seller accepted the 450 k offer in the first place. The only fault of the discount broker was that she refused to give her personal opinion. What would you rather have- 30k more (450 k minus the selling price of 420 k) or a piece of advice? I would prefer 30 k anyday.

]]> By: Jim http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-341 Jim Thu, 28 Sep 2006 03:01:41 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-341 Btw, Steve, the way this agent friend of yours could have avoided this scenario, or at least softened the blow was to show them numbers that demonstrate how this area of town is so hot that most homes sell in a week or two. This way they would at least expect it. Some people are under the impression that it should take exactly 30 days to sell, no less, no more. Btw, Steve, the way this agent friend of yours could have avoided this scenario, or at least softened the blow was to show them numbers that demonstrate how this area of town is so hot that most homes sell in a week or two. This way they would at least expect it. Some people are under the impression that it should take exactly 30 days to sell, no less, no more.

]]> By: Jim http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-340 Jim Thu, 28 Sep 2006 02:53:59 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-340 What I like to do is show the seller exactly which homes I'm using for comparison. Next, I'll go and show them similar competing homes, so we know exactly what we are up against. Next, I give them a range of prices and a range of days they can expect it to sell. I tell them the middle point will get you so many days. A few % below will ensure a quick sale, and a few % or more above you are risking it sitting on the market. Next, I just give them a choice. What is your objective, and are you willing to take the risk to get more? Everything is transparent. At least there's no shadyness about where I'm getting my data from. They see everything, and most like the fact that I lay it out in front of them like this. What I like to do is show the seller exactly which homes I’m using for comparison. Next, I’ll go and show them similar competing homes, so we know exactly what we are up against. Next, I give them a range of prices and a range of days they can expect it to sell. I tell them the middle point will get you so many days. A few % below will ensure a quick sale, and a few % or more above you are risking it sitting on the market. Next, I just give them a choice. What is your objective, and are you willing to take the risk to get more? Everything is transparent. At least there’s no shadyness about where I’m getting my data from. They see everything, and most like the fact that I lay it out in front of them like this.

]]> By: Steve Crossland http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-339 Steve Crossland Wed, 27 Sep 2006 20:46:34 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-339 Hi Larry, Thanks for sharing your Florida market story. The biggest thing I come away with is the attitude of your Realtor friend who hung in there with you, offering help even though you didn't pick him first (or second), but ultimately was able to sell the home for you. Too many of us Realtors get offended or feel like our friends "owe us" their business just because we know them, and get hurt feelings when they pick someone else. I here some crazy stories of market undulations in parts of Florida and California right now, so it sounds like you came out OK nonetheless. Steve Steve Hi Larry,

Thanks for sharing your Florida market story. The biggest thing I come away with is the attitude of your Realtor friend who hung in there with you, offering help even though you didn’t pick him first (or second), but ultimately was able to sell the home for you. Too many of us Realtors get offended or feel like our friends “owe us” their business just because we know them, and get hurt feelings when they pick someone else.

I here some crazy stories of market undulations in parts of Florida and California right now, so it sounds like you came out OK nonetheless.

Steve

Steve

]]> By: Steve Crossland http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-338 Steve Crossland Wed, 27 Sep 2006 20:40:59 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-338 Hi Leon, I think you have it exactly right. Home values can be placed in a range, but putting an exact number on a home is difficult. When I do a market analysis, I know that the number I come up with represents a snapshot in time, and it's subject to whether or not the particular buyers and sellers in a deal agree on a price near that number. Steve Hi Leon,

I think you have it exactly right. Home values can be placed in a range, but putting an exact number on a home is difficult. When I do a market analysis, I know that the number I come up with represents a snapshot in time, and it’s subject to whether or not the particular buyers and sellers in a deal agree on a price near that number.

Steve

]]> By: Larry Mayer http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-337 Larry Mayer Wed, 27 Sep 2006 16:58:43 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-337 As a home owner, I just recently closed on the sale of my home in Miami, FL. For a number of reasons, primarily greed, we decided to sell the home on our own, "By Owner." We advertised it and listed it based on prevailing market conditions and I admit we had some help from our good friend who is an experienced and professional Realtor. Within a few weeks we had an offer on the house for $410,000.00. Asking price was $425,000.00. We accepted the offer but it fell through in negotiations. We showed the house 20 times and no real offers. So, we took the next logical step and contracted with a discount Realtor. This particular agent immediately raised the asking price to $479,000.00. We were dumbfounded but acquiesced based on her professional opinion. She demonstrated market conditions and prior recent sales that appeared to represent the house we were selling as equivalent and we received one offer at $450,000.00. We asked our realtor for advice: should we just accept it or counter to $465.000.00? She did not give us any indication of what we should do, "It is your choice." Unfortunately we countered and the buyer withdrew his offer. We let the three month contract with this realty company expire and contracted with our Realtor friend. She was kind enough to list it and offered us a 1% reduction in commission if her listing sells to a direct buyer; otherwise her company will charge the full 6%. We were just fine with that. Her first move was to reanalyze the market and lowered the price to $450.000.00. The house showed well, people loved it but the market in Miami took a steep downward turn during these months recently and we sold the house for $420,000.00, noting $10,000.00 over what we might have gotten if we sold it on our own. Moral: Asking price is EVERYTHING. EVERYONE thinks their house is the best and worth $20.000.00 more than it is worth in real markets. We were fools to think we could get more than it's worth and invested our trust in a discount broker who has very little incentive to do any actual work like advise on negotiations. A solid, professional realtor is your best friend and we did great with our friend who sold our house in a few months given rapidly changing market conditions in Miami and earned her commission, every penny of it. Do we harbor distain for her for not selling at the highest price we could get? No. We earned 54% clear profit in 2.4 years on the sale of this home. Greed had no place in this deal. We are actually thankful to have gotten out when we did. Markets are down in Miami due to supply way above demand and over-valuation of properties. So, put you egos aside and let the professional sell your home. As a home owner, I just recently closed on the sale of my home in Miami, FL. For a number of reasons, primarily greed, we decided to sell the home on our own, “By Owner.” We advertised it and listed it based on prevailing market conditions and I admit we had some help from our good friend who is an experienced and professional Realtor. Within a few weeks we had an offer on the house for $410,000.00. Asking price was $425,000.00. We accepted the offer but it fell through in negotiations. We showed the house 20 times and no real offers. So, we took the next logical step and contracted with a discount Realtor. This particular agent immediately raised the asking price to $479,000.00. We were dumbfounded but acquiesced based on her professional opinion. She demonstrated market conditions and prior recent sales that appeared to represent the house we were selling as equivalent and we received one offer at $450,000.00. We asked our realtor for advice: should we just accept it or counter to $465.000.00? She did not give us any indication of what we should do, “It is your choice.” Unfortunately we countered and the buyer withdrew his offer. We let the three month contract with this realty company expire and contracted with our Realtor friend. She was kind enough to list it and offered us a 1% reduction in commission if her listing sells to a direct buyer; otherwise her company will charge the full 6%. We were just fine with that. Her first move was to reanalyze the market and lowered the price to $450.000.00. The house showed well, people loved it but the market in Miami took a steep downward turn during these months recently and we sold the house for $420,000.00, noting $10,000.00 over what we might have gotten if we sold it on our own.
Moral: Asking price is EVERYTHING. EVERYONE thinks their house is the best and worth $20.000.00 more than it is worth in real markets. We were fools to think we could get more than it’s worth and invested our trust in a discount broker who has very little incentive to do any actual work like advise on negotiations. A solid, professional realtor is your best friend and we did great with our friend who sold our house in a few months given rapidly changing market conditions in Miami and earned her commission, every penny of it. Do we harbor distain for her for not selling at the highest price we could get? No. We earned 54% clear profit in 2.4 years on the sale of this home. Greed had no place in this deal. We are actually thankful to have gotten out when we did. Markets are down in Miami due to supply way above demand and over-valuation of properties. So, put you egos aside and let the professional sell your home.

]]> By: Leon Fu http://crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/comment-page-1/#comment-336 Leon Fu Wed, 27 Sep 2006 15:22:25 +0000 http://ben.crosslandteam.com/blog/2006/09/27/perceived-value-of-real-estate-services/#comment-336 Steve, I think the problem is that the real estate market is not a completly transparent or liquid market like the stock, bond, or commodities market. Those markets are completly liquid and transparent. Everyone knows exactly what the fair price is down to the penny at any given moment and you can always find a buyer or seller at those prices. Even if there is no buyer or seller at the moment, there are always market makers whose job is to make sure you always have someone to buy from or sell to at the current fair prices. Real estate does not have this type of liquidity, so no one ever really knows if they are getting "ripped off" or not. There is also lack of transparency too. Even if all sales and prices are reported to the MLS (which they are not), it doesn't include any incentivies that the seller might have given. Steve,

I think the problem is that the real estate market is not a completly transparent or liquid market like the stock, bond, or commodities market. Those markets are completly liquid and transparent. Everyone knows exactly what the fair price is down to the penny at any given moment and you can always find a buyer or seller at those prices. Even if there is no buyer or seller at the moment, there are always market makers whose job is to make sure you always have someone to buy from or sell to at the current fair prices.

Real estate does not have this type of liquidity, so no one ever really knows if they are getting “ripped off” or not. There is also lack of transparency too. Even if all sales and prices are reported to the MLS (which they are not), it doesn’t include any incentivies that the seller might have given.

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