Step 1: A seller lists their Boise real estate with a Realtor. The agents CMA estimates that property value to be around $250,000, but the owner insists on listing the home for $275,000 with the promise to reduce the price at a distant future point.
Step 2: Market drops below the real value, leaving dream price in the air. With this home over-priced, the homes in the area continue to sell for the going market price of $250,000. This continues for the span of the 6 month listing agreement, and after all that, the homeowner concludes that the listing agent used poor marketing strategies and does not renew.
Step 3: The homeowner decides to go with another listing agent and lists the home for $250,000. The current CMA shows the home is now only worth $225,000. Still bringing up the rear, in terms of being competitively priced, the home is now racing against the rate of depreciation in order to sell. Another 6 months goes by and nary an offer is brought.
Step 4: In another rotation of agents, the new listing agent is dismissed and a replacement is brought in for a fresh start. Having gone through 3 listing agents without an acceptable offer on the home, the owner agrees to lower the price to $225,000. Having worked on this for over a year now, the homeowner understands that the home needs to be priced more competitively, and agrees to go with $225,000. The market depreciation has drained his equity and his homes value is now about $200,000.
Step 5: Do you see a repeated pattern here….
The problem is not with a bad agent who listed the Boise real estate, nor is it because the market is bad. The problem is a bad seller. Pricing is pivotal, and since the homeowner thought he knew better than the Realtor, his home lost a lot of value and took over a year to sell. Every month Boise real estate sits on the market is another month that the home is losing value, and as time goes by less and less people even bother to view the property.
With Appraisers and listing agents all using the same source for information for prices, any CMA done correctly will be accurate. By listing the home above what your agent suggests you may be getting yourself into a position of having the appraisal tell you your home is not worth that amount, which can cause you to lose the deal.
The Answer
As a real estate professional, here is what I say on how to handle it. With a seller who assumes they know more than industry professionals and disagree on pricing, simply refuse to list the property. The most desperate agents are willing to take listings like this, and so rarely benefit from it that you should be forewarned against doing that when you list Boise real estate. If you are a seller and you do not trust the suggested price of your listing agent. In order to make a deal work out that cannot meet appraised value, the seller has to pony up the cash to bring the purchase amount into reasonable boundaries, usually.
To have your Boise real estate appraised, you have to have a few hundred dollars to pay the appraiser up front. Insisting on your price, over what an appraisal will tell you is the market value of your home, may end up costing your thousands of dollars in equity, and ultimately any sale at all. Listing any real estate for more than it is worth does way more damage than good, and even costs an agent more money, so avoid it. Especially when the homeowner may be facing foreclosure, listening to your real estate agent could be the difference between getting your home sold for a profit and getting it sold at all.
The author enjoys writing articles about Boise real estate. Click on the above link to learn more about that topic!
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