How Much Wiggle Room Should You Add To The Sale Price of Your Home - Video Transcription
So, how much wiggle room should you add to your listing before going to the MLS. Well, most sellers interview one, two, three agents before listing and they listen to their opinions of value and the problem right there is agents are pandering to you so they're gonna tell you numbers that are not real numbers. They're gonna tell you numbers that will help them get the listing because they know they've got more than one competitor.
So, they pander. They say "oh, start here. I think it's worth here." Well, the problem with that is when you listen to a listing agent like that, you're gonna over price your home and then you're gonna be too far above the market and you're gonna get no offers and here's the reason why. When buyers make offers, they make offers with one thing in mind, hopefulness. If they're not hopeful they can get you to negotiate down to their happy buying number, they're not gonna make the offer, period! It works like that every single time. How do I know? I have sold over a billion. I've done almost 5,000 transactions. It's a lot of business. I've talked to so many agents out there over the past 13, 14 years, just at this company alone, I know what I'm talking about. So, let's get to it again. Let's say you choose to list your home at $550,000. Your walk number is $500,000. You can assume the buyers are $10,000 less. You should be listing it at $498,800. Right under your walk number. Why, because buyers are probably not at $498,800. They're probably at $490,000. Which means, the job of that listing price, we'll call it a listing placeholder, to attract offers is to get that $490,000 buyer and the $485,000 buyer to make an offer. You don't care if they offer $470, $460, $480, $485, $490 or full price. You don't care. You want the offer. To get the offer, they've got to be hopeful. So, if you're at $498,800, and they're really at $485,000, $490,000, they're gonna make the offer. But, if you're at $550,000, and the buyers are at $490,000, that's a $60,000 difference. All offers are meet in the middle. So, the buyer wants to meet in the middle of your $550,000 and they're at $490,000, they're gonna have to offer you $430,000 dollars. No way! That's not even a lowball. That's like from Mars. They're not doing it. So, you're not going to get an offer. You'll get showings because we're gonna compare your home against other homes and then go buy another home. Why do you think homes get twenty showings and no offers, or fifty showings and no offers? It's because they're not hopeful. Every buyer wants to meet you in the middle. You've got to be relevant. Plus, you've got to look at the market conditions.
What kind of market are you in? Now, if we were in a really big bull market, like we were in 2002, 2003, 2004, 2005, and 2006, when you can just throw a number out there and buyers would chase after it, that is different. We're not in that kind of market but unfortunately a lot of sellers still think we're in that crazy bull market. I talk to them all the time. Matter of fact, lately, sellers are thinking that because the economic numbers are so good, low unemployment at 4.7% setting records, stock market selling off today, but generally it's been on a tear for nine years, they think that good economic news means that their home is worth more. It does not. Don't conflate the two. It's got nothing to do with it. Matter of fact, this real estate market, the stock market in this ninth year of economic expansion, the pie is baked. Can it go higher? Sure, but it's been going lower quietly for five months. Sellers don't even pay attention to that because they're looking at their money and they want more for their homes. They're looking back to the prices in April, May and June. They're adding three or four percent to those numbers but we've dropped three or four percent since then. That means that they're all overpriced seven to ten percent. So, you know you shouldn't be adding wiggle room under what I just said there. Even if you add a dollar wiggle room, and you just think that the markets still strong, strong, strong, you're still gonna be overpriced.
Take my advice. Add no wiggle room. Go to your walk number. Talk to those buyers. Be relevant with your list price. Force those buyers to make an offer. That is what the listing price is supposed to do. They've got to be compelled to make you an offer. Hopefully a full price offer. Hire a professional negotiating company just don't hire any kind of agent. Hire an agent that has heavy negotiating skills that can stick to your list price and doesn't have to drop that price through a counteroffer back and forth. That's what we do at ADDvantage real estate Platinum plan. We're not gonna pander to the buyer's agents. We're gonna hold firm to that number. We're gonna push that number. Hopefully, get more than one offer coming. Maybe two, three, five offers and then maybe the price goes higher than $498,800. Maybe it goes to $505,000 or $510,00 or $520,000. That's called proving value. That is what we do at ADDvantage real estate Platinum program, which happens to be $499 up front, $2,500 flat fee at close, regardless of how much you sell for. Great deal.
We are professional negotiators. Of course, you can understand the way I'm speaking that you. That's the same way my negotiators are trained. They know how to get you all the money. They're not gonna leave any money on the table. We set up the showings for you. We do all the contract paperwork, addendums, we do everything but open the door. Check us out at getmoreoffers.com. Consider the Platinum plan. We also have two other plans there that are self-representation plans silver and gold. They're good but you're self-represented. Better off being represented by a professional team like us. Thanks for listening.