Clarifying Homeowners expectations

Excerpt from Steve Harney’s, paper on Broker Agents News
The challenge for realtors is the homeowner's perception of what their home should sell for. As recent as June 2007, a survey by the Boston Consulting Group found that fifty-five percent of American homeowners believe their home is worth more today than it was one year ago. In reality, in virtually all locations, home values have gone down.
Unfortunately, some real estate agents, who see their income decline as the number of home sales go down, are now operating in a state of fear. As a result, when they meet with prospective clients, they may be concerned they won't get the listing (and thus not get a commission), so they tell clients what they want to hear - namely that their home will sell for top dollar in record time. Then when the house doesn't sell and the client agrees to lower the price, the client/professional relationship becomes strained. Clients can't help but feel their agent gave them inaccurate information. 2
To truly shine as a real estate agent today, you simply need to educate yourself on the realities of the market and then tell each client the truth. Help clients understand where the pricing used to be, where it is today, where it will likely be three months from now, and most importantly, why it is that way. Only then will clients be able to make a realistic pricing decision that will enable you to help get their home sold.
1. Increased inventory
As owners se the market declining they started placing their properties to sell. This allows buyers to have a better negotiating opportunity, and tends to lower prices.
2. Increased mortgage rates
In the last months mortgage rates has increased and this disqualifies customers. Also some mortgage companies have closed their doors.
3. Increased mortgage restrictions
Now buyers need not only a down-payment but a very good credit to qualify. This again reduces the number of possible customers that can buy your house.
4 Increased vacancy rates
A lot of people bought homes in the supposition that the increased value of the home will allow them to make an easy profit in very little time with the turn around of the market a lot of this house are being sold at a loss affecting the other properties in the neighborhood.
5 Increased foreclosures
If one house forecloses in a neighborhood process go down 5% if 8 houses foreclose prices go down 20%. We are expecting a big number of houses foreclosing in the following years. If you have any doubts go to Broker Agent Foreclosures and check foreclosures in your area.
The New Era of Real Estate Sales
If someone wants to sell their home for a decent price, they have to list now - not three months from now and certainly not a year from now.
So when you conduct your next listing presentation, be sure to educate yourself on these five factors, and then explain how these factors impact your clients' selling decision. Let clients know the realities of the market and what their home will likely sell for given these five considerations.
1. Harney, Steve, Managing Homeowner's Expectations Broker Agent News E-Letter - Updated for Sept. 30, 2007