Why isn’t it selling?
Any agent that does a good amount of listing business will be asked this question from time to time. While it is an agents job to price and market a house where it will sell for the most amount of money in the quickest time frame, sometime things do not work out. I often think of a listing where I had recommended a price of “X”, and the seller wanted “X” plus. The seller basically told me that if I wanted to represent him, we had to list the house at his price, or he would find an agent that would. My response was that I would take the listing, but the market would let us know who was correct about the price. The house sat, and the seller asked me why we did not even get to the point of getting an offer, feeling that someone would at least want to negotiate price. I told him that unreasonable price dissuaded showings and that if we wanted action, he should follow my price guidance. Over the course of a few months, we steadily lowered the price to the point that I had recommended, and the house sold.
It is very easy for owners to do their own research on market pricing, and come to a conclusion (sometimes wrong) on price value. There is no shortage of sites that will provide price guidance. In some cases, where refinancing was involved during the course of ownership, an old appraisal is the culprit. The reappraised property shows an above market price, and the owner relies on that as price guidance. Lots of time, where there is lots of equity in the property, a bank comes in high on the valuation, as they have nothing to lose, and the owner may want to take an even bigger loan out.
Another reason that leads to unrealistic pricing is that some agents that simply want to “buy” a listing in hopes of convincing an owner to lower price later.
Many folks look at a ratio of selling dollars to size, and value their home on a dollar/per sq’ basis. This is a dangerous strategy on LBI, as it ignores location, views etc. The biggest issue that leads to a poor pricing is a focus on homes that are currently for sale, but not sold. It is imperative that owners doing their homework prior to talking to an agent to get price guidance look at SOLD properties. This information is a bit more difficult to obtain, but it is out there.
Location plays a much bigger role in value on LBI than in mainland properties. A beautiful home on the bayside without views can me much less valuable than a rat-trap on the ocean block with potential views. Certain segments of the market can be more difficult to sell, and require a sharper price than others. Right now, there is no shortage of nice homes to sell on the bay, but tear-down lots with potential views on the ocean side are selling at a premium. How would a homeowner know this?…only by talking to a realtor.
Another perspective of folks that list their house for sale is that they want to “leave room for negotiation.” If the price is high enough to limit showings, this strategy can be very dangerous. It is always better to have the opportunity to say no to an offer than to not get an offer.