In the real estate industry one of the metrics agents use to measure their success against the market is the List Price/Sale Price Ratio. We know that the sooner the seller prices their home to the market the quicker it will sell and for more money. Overpricing simply insures it stays on the market longer and sells for less money later on. While this may sound counter to logical thinking, it is a truth known in the industry and born out by statistics.
The Realtor recommends the price, but the seller chooses which Realtor to hire and which price to list at. While the seller sets the price, the market determines the value. If it is overpriced it will languish on the market.
Assuming you have a home that is priced appropriately, there are statistics to measure the market and the average agent’s effectiveness. For instance, the average agent selling a single family home in Lee County Florida in July of 2015 did so at 94.5% of asking price. In other words, the buyer received 5.5% off asking price on average.
Could Choosing the Wrong Realtor Cost You Money?
We’ve been monitoring this statistic over the course of the last year and by and large it’s been running about 94%. It can vary a little bit each month. And we know over the years the Ellis Team averages around 97-98%. We recently pulled up our sales in the last year and it ran 98.02%. That’s about a 4% difference for the year and 3.52% over July’s official numbers.
So how much is 3.52%? Well, with an average sales price of $337,848 it works out to $11,892. The perception is all Realtors are the same, so what would account for almost $12,000 difference in net to the seller?
3 things influence how much a seller receives at closing.
- Negotiating skills-The skills of the Realtor you hire make more of a difference than you might think. It doesn’t matter how strongly your agent says the price is firm or argues your position. What matters is how well your agent works with the other Realtor, how much information they gain on your behalf about the buyers ability to pay, motivation, etc. Your agent should also evaluate your position in the marketplace to see where your home stands. This tells you what cards are in your hand and how you should play them.
- Marketing- Effective marketing brings more interest, and more interest brings the seller more money. Many times an agent can create multiple buyers and the seller can select from the strongest of the offers. Advertising in several places such as print, online, social media, etc, can pay off big for the seller.
- Secret Sauce- All Realtors have or should have a Unique Selling Proposition. It’s your job as the seller to determine if the agent knows what they’re talking about and if that proposition actually works. Our team has come up with a home selling system so remarkable that it helps us sell homes fast and for top dollar. It is based upon interviews with Top Realtors from all over the country and our own proprietary marketing methods. We no longer share all the details of this system but we’d be happy to sit down and show you many of the parts so you can decide for yourself.
The real proof is in the results, not the proposition. When you’re interviewing agents to sell your home, look at their past sales. Evaluate their List Price/Sale Price ratio. Ask detailed questions. Have a conversation about negotiating. If the agent’s strategy is simply to say the price is firm, you might want to ask more questions.
Have the agent explain in detail the recommended price for your home. Is the strategy to test the market or do they know what it should sell for? If they don’t know, how are they going to sell it to a buyer?
If you’re thinking of selling, we’d be happy to talk to you. You can call us at 239-489-4042 to set up an appointment and see if working with us can net you more money at closing.
Good luck and Happy Selling!