Sellers of Williamstown MA real estate tend to seek the advice of several local Realtors ® who will provide them with guidance and a market value opinion upon which to base a starting listing price for the property. SELLER BEWARE! Home valuation advice from Realtors® can be fraught with conflict of interest. Any Realtor® is strongly motivated to get the seller's signature on the listing. Adding another listing for a real estate agent increases the chances that a listing will sell, no matter how long it make take or at what price. Williamstown home sellers can be easily be convinced that their Berkshire County home is worth more than "true" current market value of similar homes in the Berkshires.
HOUSTON WE HAVE A PROBLEM IN THE BERKSHIRES! One of the most common problems seen in the Berkshire County real estate industry is "buying the listing". What this means is that the Williamstown real estate agent who suggests the highest and most appealing list price to a seller will always walk away with a signed contract and the listing. Once the Realtor® has the contract signed, the Realtor® who got the signature on the contract will then begin to actively work the seller's price downward to a point where some interest by buyers is shown. Until the price reaches that point, there will be few lookers and no buyers. The point where a Williamstown buyer is willing to pay the actual market value price is the point at which that Williamstown home will sell and no one minute before.
BUT MY WILLIAMSTOWN HOME IS REALLY WORTH MORE THAN THAT! "Buying the listing" occurs so often that every agency and Broker has a story to tell. Harsch Associates Real Estate Agency recently had firsthand experience with "buying a listing" that involved another local Realtor® and Williamstown MA seller. This particular seller had asked several agents to provide them with a market value estimate for the home. After doing a comparative analysis of the local Berkshire Market and previously sold homes similar to the seller's our agent had determined the home's selling price would be approximately $320,000.
A competing agent priced it substantially higher and obtained the listing at a starting price of $495,000. "Buying the listing" and what is known as " vanity pricing" netted a new listing for the other agent who gave the highest valuation to the seller.
Once listed there followed a series of price adjustments over the course of the next 10 months. The starting price of $495,000 reduced to $439,000 and then dropped again to $399,000, and finally down then down to $349,000. At which point a buyer was found and the home was sold after 11 months at $316,800. Selling the home took almost 12 months because the price started out too high for the Williamstown real estate market. For example if you are buyer looking for a new car and you visit several dealerships. The 3 cars you settle on all have great options and are available for delivery now. All things being fairly equal you will most likely choose the car which is selling for the lowest price. It is human nature to seek the best value for the dollar. It does not matter to a buyer what a seller values his car at. It matters to the buyer what VALUE he/she is receiving for the amount the buyer has to pay for the car. It is the same with buying a Williamstown home or any Berkshire County Home.
It the example above where the Berkshire Home sat on the market for 11 months, harm was done to the seller. Placing a time value on money reveals that at 1.5% carrying cost monthly for an unsold home and the additional 10 months on the market cost the seller $47,520. That is if we value the home at the sale value of $316,800. In fact, in this seller's case, time was important. The seller wanted a rapid sale for undisclosed reasons. It is reasonable to argue that the seller lost on this sale related to the" vanity listing" or "buying the listing" valuation price given by the agent who wanted the listing at any cost.
WHAT DOES LENGTH OF TIME HAVE TO DO WITH SELLING MY HOUSE? In a recent article by Prudential Real Estate, the author concluded that an unsold home costs 1.5% of its value, per month to own. This includes all costs such as debt service (or the value of money), upkeep, insurance, taxes, etc. This seller lost an extra eight months opportunity to sell because his house was overpriced at the outset. The Williamstown real estate agent who "bought the listing" realized that the home was overpriced, but reasoned that having another listing was another chance of a sale, no matter how long it took. After all, the Harsch agent and the other local Williamstown real estate agent have access to the same comparative market values and sold listings for Williamstown.
Overpricing cost the seller time and money because when Williamstown MA homebuyers search for a Berkshire home, they search within a selected price range. Whether it is in Williamstown or Stockbridge, Lenox or Great Barrington pricing your home above what it is actually worth in the current Berkshires market means that your home will not appear in many net searches at its true value because buyers type in amounts in the searches that they are willing to spend for a home. In this Berkshire County buyer's market, the willingness to spend above value is very unlikely.
WHY DID THEY OVERPRICE OUR HOME? Our Williamstown Real Estate Seller advice? Beware of an agent who suggests a price that is much higher than anyone else has given you. It is not that the agent with the high price believes your home is worth that amount. The main goal is to get your signature on the listing and increase that agent's chance of a sale however slim.
GET THE RIGHT PRICE THE FIRST TIME. Use a Berkshire County bank approved licensed real estate appraiser and appraisal to utilize as the guide to the loan value of your property. The buyer will do the same thing. Look at the local tax assessor's valuation of your property. Ask your agent if they know what the assessed value of your property is and what are the most recent homes sold and how much above assessed value did they sell for? Your agent should be able to tell you within a few seconds. You can bet the agent knows the info. They may not want to share it with your or more likely say it doesn't matter about assessed value.
PROTECT YOURSELF FROM THE WILLIAMSTOWN REAL ESTATE AGENT WITH A PEN AND DESIRE FOR JUST ANOTHER LISTING. Price your home to sell in the current Williamstown MA real estate market. Know the assessed value. Know the appraised value. Know the inspection faults and then make the best decision. If you aren't interested in how long it takes to sell your home, remember every year that goes by decreases the value of that home. How long would you hold onto a stock portfolio item that you knew would go down every year?