Realtor Sander Scott argues that standard pricing advice serves agents, not sellers. Agents price client homes lower and accept faster offers, while holding out for higher prices on their own homes. On a $500,000 sale, a $20,000 underpricing costs the seller big but only costs the agent a few hundred dollars in commission.
You only get one chance to sell a property. Don't just take my word for it. Check out the bestselling book Freakonomics and found something pretty surprising. Or maybe it's not so surprising. Every realtor tells you the same thing when you're thinking about selling your home. They say that the worst thing you can do is to overprice it. But let me ask you this. Whose interest does that really serve? Is it actually in your best interest as the seller, or perhaps does it mostly serve the interests of the realtor who really just wants to make a quick sale so they can move on to the next client and keep stacking up deals? That's what we're going to dive into here today. Whose interest does it really serve to make sure that you don't overprice your home? Because here's the truth. Pricing strategy isn't a one-size-fits-all proposition, and blindly following the never overprice rule might actually cost you tens of thousands of dollars when you sell your home. In fact, don't just take my word for it. Check out the bestselling book Freakonomics. The authors studied thousands of real estate transactions and found something pretty surprising. Or maybe it's not so surprising that when Realtors sold their clients' homes, they priced them lower and accepted quicker offers. But when those same Realtors sold their own homes, they stayed on the market longer and ended up getting significantly higher prices. Let me repeat that. When Realtors sold their clients' homes, they priced them lower and accepted quicker offers. But when those same realtors sold their own homes, the homes stayed on the market longer and ended up getting significantly higher prices. Now, think about this. Here's why. On a $500,000 sale, the difference between, let's say, accepting an offer at $480,000 versus a full price $500,000 offer That means $20,000 difference to the seller, to you as the seller, $20,000 difference. But to the realtor, you're talking about maybe a $500 difference in commission. So you have to think about, do your interests align with the realtor's interests? In this case, the realtor might be encouraging you to take the $480,000 deal that's a $20,000 loss to you. It's only a $500 loss or somewhere thereabouts to the realtor. So you want to make sure that your incentives do in fact align. A realtor's incentive sometimes can be speed, not necessarily maximizing value. Now I'm a broker owner of my own brokerage, But before that, I worked with two different brokerages, both of which trained their agents on the same standard line. The worst thing you can do is to overprice your home. Why? Because it makes life easier for the agent and it makes the brokerage look good when it turns over homes quickly. The problem is, is that that approach doesn't always serve you, the client, best. And that's when I decided to do things a little bit differently. My job is not just to get your home sold. My job is to make sure you sell it for the maximum value possible. After all, you only get one chance to sell a property typically, so you only get one bite at that apple. So make sure that you maximize the value because you don't get to sell it again. So maximizing value means sometimes pricing it right at market value. Sometimes it means pricing it just under market value in hopes of creating a bidding war. And yes, sometimes it means strategically pricing it higher to capture every dollar the market will bear. Think about it from a Goldilocks type perspective. We don't want to go too low. We don't want to go too high. We want to price it just right. But just like in the Goldilocks example, that is going to vary based on Not, not the taste or the sensitivity to temperatures in Goldilocks, but it's going to depend on your particular circumstance as a seller. Every seller's circumstance is different. A seller who is selling because there's a job change and they need to move as a result and they cannot afford to carry two mortgages, that's a different— that's going to generate a different pricing strategy than a situation where a home has been inherited, it's part of a, of a trust, and there are 4 parties involved and they all, uh, all have differing opinions. That's going to be a different pricing strategy. Each seller situation is unique, and so you need a realtor and a partner to work with who's going to really listen to your circumstance and then develop a pricing strategy and an overall marketing strategy that is going to best serve you and your situation and help you maximize the total value involved in selling your piece of real estate. It all depends on your home, your timeline, your property, and your goals. As a broker-owner, I answer only to my clients. I don't answer to some corporate office pushing quick sales. My focus is on putting your interests first, Always. Because when you sell your home, it's not about just making things easy for me. It's about getting you the outcome that you deserve. So if you're thinking about selling, don't just accept the standard advice of don't overprice your home. Get a second opinion. Let's sit down, talk through your goals, and build a pricing strategy that works for you and maximizes your value. There's a link below in the description where you can book a consultation with me. Because you don't just deserve a quick sale, you deserve the right sale that meets your needs. I'm Sander Scott, broker-owner of Nett Real Estate here in Leonawee County. Thanks for watching, and I'll see you in the next video.
