Despite reality, sellers (& buyers) remain emotional on price
Homegain recently conducted a survey of 700+ Realtors® nationwide, the results of which surprised me a bit. It seems when it’s our home, we feel it’s worth more than the home next door.
Delusions of value
45% of homeowners think their homes should be listed 10 – 20% higher than what their Realtors recommend. Nearly 20% think that their homes are worth 20% higher than their Realtors’ recommended listing price. In other words, ~65% disagree with your professional opinion. Opportunistic homebuyers are experiencing a similar disconnect with only 18% of believing homes are fairly priced.
Emotional appraisal vs. reality
Even with the harsh realities of the current market, decisions about selling or buying real estate remain emotional, despite a recent Zillow® poll that showed that sellers were no longer ‘in denial’ regarding the U.S. housing slide.
Will the Stimulus stimulate?
The Obama stimulus package was not viewed favorably by a majority of Realtors. ~60% feel it will have no impact on home prices or may actually cause home prices to fall. 38% think the stimulus package will stabilize home prices and just 3% believe it will help increase prices.
Reality used to be a friend of mine
How do you win listings when the client has convinced themselves their home’s value is higher than your professional recommendation? Particularly, if they’ve visited a website that has helped validate their misconception – as Ginny Cain discussed last week. Mark Eckenrode commented on Ginny’s post “it’s important to remove the website from the playing field altogether, or at least re-frame how the client views the website.” And, to point out while these resources are a good resource for frame of reference, the data may be inaccurate or stale and it lacks the advantage of neighborhood knowledge.
Armed and dangerous
It seems the biggest challenge is getting the homeowner to convince themselves the value is where you say it is. You have all the data: CMA’s, recent & historical sales, comps, etc. And, you are prepared to address the inflated prices provided by the web sites mentioned above. Now what?
I’ll bet the most critical communication skill for agents is effective listening. People don’t buy what you wish to sell. They buy what they need. The same could be said when trying to “sell” the reality of your recommended listing price. Once you’ve asked what it is about their home that warrants a higher price than the data warrant, listen. They may just end up explaining it to themselves.