I wish I had a quarter -- or an American Eagle gold coin -- for every potential seller who has said this phrase to me:
"We don't want to give our house away."
My blogging colleague Alan May who works in the Evanston and North Shore area of suburban Chicago, says it all in the following post.
If you're thinking of selling your home in my territory -- St. Louis' Southwestern Illinois suburbs -- read on and think about the core question. Why would someone pay more for your house than its current value in the marketplace?
"I know" says my reluctant seller "that you keep telling us that our price is too high. But besides reducing the price, what else can we do to attract more viewers, and thereby more potential buyers?"
"Well" I reminded "as you remember, i told you that the price you wanted to list for was too high in the beginning, but that would give it a try, and if we don't have an offer (or an inkling that one is forthcoming) then we'd reduce the price to a true 'market value' within 4-6 weeks."
"Yes, I remember. But I just don't want to give my house away. We've done so much work, we've put so many improvements into the house."
"You sure have, but the market has fallen significantly since you purchased at the height of the market. And while your home is lovely, and the improvements make you desirable, your price places you well above the competition with similar amenities."
"I'm still not ready to reduce our price. What other Realtor tricks do you have in your bag of tricks to attract new showings?"
"Let's picture that I have two American Eagle gold coins. They are a commodity, just like your home, okay? I'm going to lay them both on the table in front of you, aren't they pretty? They're both American Eagle government minted coins, that are (for the sake of argument here) 1 perfect ounce, of pure solid gold.
"Okay, let's ignore today's actual prices (because unlike housing the price of gold is as high as it's ever been), and pretend that Gold has been hit, just like the housing market. So, the first coin I bought at the peak of the market in 2005 for $1,800. The second coin, however, I bought just last year at almost half that price at $1,000.
And today, gold (for the sake of our illustration here) is trading for the dismal price of $1,100 per ounce.
So, I know, that in today's market, I can sell both coins for $1,100 each. On the second coin, I'd make a $100 profit. But on the first coin, I'm going to lose $700.00.
Is there anything in my bag of tricks that I could use that would cause someone, anyone, to be willing to pay me $1,800 or more, for that first coin? Anything at all that you can think of?"
"Uh... I don't think so, after all, they can get lots and lots of gold coins just like it for only $1,100."
"That's exactly right, gold is a commodity, just like your home. There are lots and lots of homes, just like yours for significantly less than you're asking. And there's no amount of tricks, no amount of open houses, no amount of colour brochures, no amount of catering at the next broker's tour, no amount of skywriting, billboards, print ads, or buyer's agent bonuses that will convince someone to pay us $1,800, when they can buy one of equal value for only $1,100."
"You know", he starts with a frown "sometimes you're too clever for your own good."
"I know, I know." I reply with a smile slipping onto my face, as a I slide the "price reduction paperwork" gingerly across the table for his signature.
ALAN MAY, Realtor®
Specializing in Evanston Real Estate and North Shore Real Estate
Coldwell Banker Residential Real Estate, 2929 Central Street, Evanston, IL 60201
847.425.3779 Cell: 847.924.3313 Email: Almay@aol.com
Evanston Real Estate & North Shore Real Estate
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