Joe Rand is the Chief Creative Officer at Better Homes and Gardens Rand Realty. He’s also an active blogger, writing for the RandRealty.com “Market Intelligence Blog” as well as his real estate education blog “The World’s Best Real Estate Agent.” He also maintains a personal blog about his experiences moving to the suburbs from the city, the “Move to Suma.” This post is from his blog.
When I listed my home for sale last year, I worked with two great agents. I could have just listed it myself, or with my wife, or even with one of the endless members of the Rand family who are all licensed real estate professionals. But to paraphrase the old adage – “a REALTOR who represents himself has a big dummy for a client.” (Editor’s note: not the actual adage)
So I hired two agents the most meritocratic way I could think of: the top agent at my company, and the top agent at the local office. They’re both great, they’ve both been with my firm for a long time, and I like and respect both of them.
Now, my home was not an easy sale. It had a bit of that “best house on the block” problem, a 4,500 square foot condo that was twice the size of any other unit in the building, with a higher level of amenities than anything else in the area.
And it didn’t help that I overpriced it.
Yes, yes, I admit that now. I was overpriced. Wow, that feels really good to get it off my chest.
“I’m Joe, and I’m a price-aholic.”
So go ahead, roll your eyes. Another overpriced seller, and this one should have known better. After all, for 15 years I’ve been teaching how to persuade sellers to price their homes to the market. I know all the scripts, I know all the techniques.
And yet when it was my own home, I was immune.
I wanted what every seller wants, and said what every seller said – and what every broker hates to hear:
“Let’s test the market.”
“I’m not in any hurry to sell.”
“I can always come down later.”
“It only takes ONE buyer!”
God, I was a nightmare. But that’s part of the lesson – even someone who knows the market, and knows the industry, can get starry-eyed about pricing his home.
My agents handled it beautifully. They priced it where I wanted, and gave me time to see what the market was telling me. And for a long time they didn’t push me to lower the price, until one day they called me to say that they thought we should meet to discuss “the marketing.”
AND I LAUGHED AT THEM. “Please, I know that line. I’ve TAUGHT that line. You don’t want to talk about the market, you want to beat me up on price.”
So I knew what was coming when we met. We went over comps, we went over feedback, and at the end, they recommended a fairly dramatic price change.
And that’s where I got the other part of the lesson. Because when they made their recommendation, my immediate, instinctive reaction was this:
It was like a little cartoon character with horns and a pitchfork had perched on my shoulder, whispering evil little thoughts into my brain:
“They just want a quick sale!”
“They want me to GIVE IT AWAY!”
“What do I need them for if I’m going to price it there?”
Think about that. I’ve been doing this for almost 20 years. I know the market. I know economics. I know how real estate works. Even more, I know these agents, whom I trust and respect.
And yet I had that reaction! DAMN AGENTS!
Here’s what I learned: sellers don’t trust agents on price, no matter what. It’s just impossible.
Even if we’re right, even if we have a great relationship with those sellers, they’re never, ever going to fully trust us. They’re something deep-seated in the psyche of all sellers that make them suspicious of their agent’s recommendations on price.
Put it this way. I know the industry. I know the economics. I knew and loved my agents. If I could have that reaction, then anyone could.
So what should agents do? Well, for one thing, never take ownership of price. The old-fashioned approach of telling a client “I’m the professional, trust me,” as a way of getting a reasonable price is a really, really bad idea. Because they don’t.
Remember this: you’re not responsible for the price. You’re just “the weatherman.” The weatherman doesn’t control the weather, he’s just there to tell us what the environment is like — it’s up to us to decide whether we want to have a picnic.
Same idea – you don’t control the market. You don’t price the home. Just show them what the market is saying, and let them figure it out for themselves. Show them, don’t tell them, because they’re never going to fully trust you.
And that’s what happened to me. Luckily, the cartoon character on my other shoulder, the one with the halo and the wings, whispered much smarter thoughts into my other ear – something about how I’d tested the market for long enough, and it was time to find my buyer.
So we lowered the price.
And we were in contract in two weeks.
Editor’s Note: This was originally published on Inman Media on October 13, 2015 as “Realtyperson, Heal Thyself: Sellers Will Never Trust Us On Price.”