Years ago, I decided to sell a condo I was using for a rental. I bought it in foreclosure, thinking it would give me some immediate cash flow and long-term growth. Eventually, it became obvious I was not cut out to be a landlord, so I decided to put it on the market.
Being an experienced Realtor, “obviously,” I knew how to price a property. After all, I was a professional, right? So, like a lot of sellers, I came up with the perfect price and then added 10% for negotiation and stuck the sign in the yard. Almost immediately, I started getting calls–but not from buyers.
These were fellow Realtors in the area calling to see what I was smoking. It turns out my so-called friends in the business had been discussing my new listing, and a few of them mercifully decided to clue me in on the joke.
Turns out I had knowingly stepped into an age-old trap. Overprice the property with visions of grandeur and an inflated idea of what my property was worth. “Seriously,” they said, “you have to lower your price, or you’re never going to sell that thing.”
Did I listen? Of course not! Instead, I figured since my property was “so unique” and the market was starving for properties like mine, I could ignore all the warnings. There was the usual burst of showings in the first week, and then….nada. Seriously – I went almost two full months with nary a prospect. No showings, no questions, no calls, and certainly no offers.
But I was so stubborn and so convinced that I knew better than the market. I assumed I was being boycotted since I ran a different kind of brokerage. Never mind that my logic was flawed. Really Glen? Every agent in town was boycotting me?
Let’s say the entire Realtor community somehow got together and decided to freeze out old Glen. First off, that would never happen. Realtors rarely agree on anything–now, all of a sudden, they are this well-oiled machine of total alignment. Now they can suddenly control every buyer and make them avoid my listing? I think not, counselor.
Since my sign was in the yard and my information was on the website, any interested buyer whose agent was in on this fantastically fictitious embargo could have just picked up the phone. But that didn’t happen, so I guess in my altered state, I just assumed all the buyers were in on the plot as well. Boy, was I fooling myself. The inside of my head can be a very dangerous place, amigos.
Fast forward through my self-punishing melodrama, and let’s see how this saga turns out. I ended up lowering my price many months later and only after several other similar properties had come on the market, thereby making mine much less of a rarity. 9 months of denial later, I sold the property at a fire sale price to another investor who knew I was eager to be done with it.
Had I listened to, um…everyone…chances are I would have sold it A) much faster and B) for more money. Remember, time costs money. I also missed the initial burst of activity that would have helped me get top dollar. I let my pride, my ego, and my stubbornness get in the way.
The trap I fell into is the same trap sellers fall into every day. Overprice, ignore the crickets and don’t react, and then finally figure out what all my buddies already knew:
Real Estate Truth #1: “The market never lies–not ever.”
Real Estate Truth #2: “If your property is not selling, it’s overpriced. (period)”
Normally I would tell you to listen to and follow every word of my advice. In this case, please ignore old me and listen to the much wiser NOW me. Do your best to nail your pricing when you first list your property. Look at the comps. Check your competition. Do the math. But in the end, if you put it out there and nothing happens, you need to adjust or be ready to wait–sometimes years–for the market to catch up to your futuristic value of your property.
The choices for sellers are the same every day that their home doesn’t sell. You can lower your price and try to spark some interest, or you can wait and see what tomorrow brings. No amount of fancy advertising or changing agents, or open houses will alter the fact that buyers are simply not interested in your property at the current price. If you lower your price, no matter how long you’ve been on the market, you’ll invariably attract new buyers. Eventually, you’ll find the price that buyers will pay today.
If you want some help getting your pricing right, head here to check out my post on how to price your home.
For a complete, up-to-date market breakdown of your property, why not get our free Realist® Report? This 10-20 page comprehensive data bundle contains mountains of rich details like current pricing analysis, the Real AVM® ranges, Sell scores, local comps, neighborhood data, market trends, and flood plane information. Just ask us for it here, and we’ll send it. It’s free, and you can’t possibly have too much information before you sell.
Just don’t wait nine months like I did. Otherwise, you may be doomed to be just like old Glen–and nobody wants to see that!
As always, I’d love to hear from you. Was this helpful? Do you have other questions? Do you want to confess your biggest learning experiences, aka horrible mistakes? Hit me up HERE with your thoughts and comments. I read and respond to every email…eventually.
Best of luck,
Glen
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