Pricing: is your agent always right?
Your mission, if you choose to accept it: putting your home on the market.
You’ll be confronted with two choices. You can either list it yourself or hire a realtor for the job. (Spoiler alert: Owing to the years of experience possessed by listing agents, most sellers opt for the latter.)
But it so happens that sellers may not actually heed their agents’ advice on property pricing. This leads to a conflict. Below, we explain why you should indeed listen to your agent when evaluating your property’s market value.
Real estate agents perform competitive market analysis 24/7
Though you’re perfectly capable of doing your own research, there are things you may miss due to a lack of experience or expertise. Real estate agents, however, know exactly what to look for in a competitive market analysis (CMA).
Their experience ensures that you’ll receive the most accurate valuation on your home possible. And they need not specialize in your neighborhood to have a solid sense of the local housing market.
They will seek out similar properties in the area, along with their associated asking and sales prices. This enables agents to analyze if the local real estate market is exhibiting an upward or downward trend. Using this wealth of information, they can name a competitive list price for your home.
Their research doesn’t end there.
A real estate agent also will:
- provide information about the state of the current economy on the national level. A falling economy will cause a decline in prices, whereas a rising economy will increase prices.
- perform onsite inspections of your property, including both the interior and exterior—all the while noting key features that may have an impact on the overall price.
- review the stated value on the latest property assessment.
This may be difficult (or at a minimum, time consuming) to assess on your own, especially if you’re preoccupied with finding your next home, preparing for a new job, or accepting the emotional fact of your property sale.
Most successful property sales have one thing in common: they made the right pricing decision, often with the help of a realtor.
Why is it so important to set an accurate price?
Choose too high a number and it may take months to sell—or your property may not sell at all. (A big setback for homeowners, as the next option would be re-listing the property at a lower price point after some months have passed.) When a property remains unsold for a long period of time, it sometimes will be viewed as defective by prospective buyers.
Chris Dossman, a real estate agent in Indianapolis, emphasizes this point in an interview with Realtor.com. “Buyers get suspicious when they see a house that’s been on the market for a while. They think that something is wrong with the home,” she added.
Sellers are then forced to drop their asking price in an attempt to attract buyers. (Think of it as a miscalculation penalty…and a rough one at that!) Because of this, it’s important to get property pricing right from the moment your listing goes live on the MLS.
Listening to licensed real estate agents and letting them do their job is key. Of course, you’re not expected to be an expert, so don’t hesitate to ask questions about the process and strategy behind property pricing.