Step 1: A homeowner decides to list their Boise real estate with an agent. Realtor does a Comparative Market Analysis (CMA), and determines the home is worth $250,000, and the seller decides to list the home for $275,000.
Step 2: House fails to sell. With this home over-priced, the homes in the area continue to sell for the going market price of $250,000. The six month listing agreement expires and the seller decides the home did not sell due to the listing agent not doing a good job, so he fires him.
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. For an additional 6 months, the home is marketed and goes unsold.
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….
Given the information, the listing agent and the market variables cannot be the cause of this problem. The problem is a bad seller. Had the home been listed for $250,000 from the start, it would have sold. Boise real estate has been depreciating on a weekly basis, so letting any listing sit on the market at a steady price is disastrous for the seller, regardless of how much they have put into it.
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.
A Better Strategy
You can remedy all of this with this easy solution. If the seller is determined to list the home for a price that I feel is unrealistic, I don’t have to take the listing. It doesn’t make sense for agents to take ‘dead on arrival’ listings like that because we don’t get paid for our services on Boise real estate that don’t sell. For a seller, if you think your Realtor’s analysis of your home is inaccurate, it might be a good idea to have a formal appraisal done on the property. To close a deal that is priced above the appraisal, either the seller or the buyer have to come up with enough cash to make up the difference, at that doesn’t happen often.
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!