By Peter Ricci
Among the many spectacular claims and observations found in Steve D. Levitt and Stephen J. Dubner’s best-seller “Freakonomics” book, perhaps the most noted (and infamous) was the statement that real estate agents sell their own properties for 3 percent more than they do for their clients, while keeping the homes on the market for 10 additional days.
A deliberately provocative work of polemics, Levitt and Dubner’s book often complements its controversial statements with equally contentious explanations, and they interpret this Realtor/client statistical anomaly in such a manner, arguing that the contrast is a study in benefits. It is not worth it, they argued, for an agent to seek 3 percent increases in their clients’ selling prices, given how commissions work in real estate. So, they are apt to sell the home for the most convenient price, rather than griping over seemingly negligible price points.
Regardless of the reasons, though, the “Freakonomics” scenario presents an interesting comparison, one between the needs of the clients and the desires of the agent, and it serves as an excellent backdrop for revisiting some key tenets in selling property. Want to be a top producer? Here are some tips to sell like one, in a nutshell.
According to the National Association of Realtors (NAR), the second biggest reason that a home will not sell is the cleanliness and decor of the property, which wards off potential buyers through a deadly combination of clutter and grime; simply put, a home that is not well-kept, clean and organized is not a home that will sell. As the agent, it is up to you to not only be aware of such impressions and signals, but to notify your client of detrimental effects. Agents can spot these details in their own properties, so why should they not extend the same standard to their clients?
Evaluations in Price
We just wrote that NAR pinpointed cleanliness as the second biggest reason for a home not selling. The first, unsurprisingly, is price, and given the rollercoaster ride that home values have taken in recent years (the latest Case-Shiller estimated that home values have fallen by 32.9 percent since 2006), price has never been more important for a home’s success on the market; therefore, it is especially important for agents to stress accuracy in pricing.
Agents have a good grasp on what their own properties are worth, but they are also aware of how much they can be expected to sell for, and thus, they realistically price the property to sell based on market conditions. NAR has stated that need, ego and greed are primary motives when pricing a property, but in today’s market, accuracy should be a considered factor for clients.
Acceptance of Offerings
As with pricing, listing a property and fielding the subsequent offers is a balancing act of priorities. Though you want to wait for the best offer, you risk waiting to the point of irrelevancy, holding out to when a property’s listing time negatively impacts its reputation – and buyers are left wondering what deficiency has caused the home to sit on the market for such a long time.
View the property as if it were your own, and shape your strategies around that perspective. Consider re-listing the home, with new photographs and a different marketing focus; consider advertising on different sites; consider reaching out to local agents who may have interested buyers. By shifting your vantage point, and engaging in what amounts to a looking glass self for the home, you may be able to close that gap that Levitt and Dubner so notably wrote about.