I had a client back about a year ago contact me about doing a Broker's Price Opinion (BPO) on their home in NE Tallahassee. They were good friends so I spent about 3 hours rendering the opinion. Banks pay brokers $100 for drive by BPO's. I did the heavy lifting for my friend and really drilled down on it. I felt that I had pegged it pretty close.
I advised them that there was about 30 months of inventory in their subdivision. I pointed out properties that had been on the market more than a year and had to reduce their price $100k or more and were still sitting. A home is sort of like a can of peaches that sits on the shelf too long. Once it sits too long people begin to wonder what is wrong with that property. I advised them to go to market at $429k and they would sell it pretty quickly.
They thanked me and put the For Sale By Owner sign out and priced the house at $510K. After all what did I know. I merely make my living in this business. The house sat and sat. Along about mid-June I got a call from them. Would I please take the listing? I asked what the price was going to be. They said $479k. I told them that was $50k too high. They were unmoved. I told them thanks but no thanks. My wife was a bit embarrassed that I did not take the listing. I explained to her that I had a decision to make. I could take the listing at that price and lose their friendship when it failed to sell. Also anyone and everyone who drove by my sign would question why that broker could not sell that house. He must not be very good. Or I could risk making them mad and losing thier friendship right at the front end by refusing to take it. I chose the latter course. They chose a very successful and effective broker to market the home. It went to market at $479k.
I happened to think of them a few hours ago and I checked on the status of thier listing. It has been almost a year since they spoke to me. They recently reduced the house to $429k and will most likely sell it at that price. ( Update: The house sold and closed 2/26/10 for $392k)
The absolute most important thing you do when you move your property onto the market is set the price. Our market is very, very price sensitive. Get it right from the beginning. Listen to the expert and make it happen. That is what we do to earn our commission check.
Visit me on the web at http://elvass.com/