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Anthony Lamacchia: Your listing isn’t selling, but you should still get asking price for your seller. It’s 20 days on the market, it hasn’t sold. When you get an offer from a buyer, they should pay asking or they should pay over. Wrong. Anthony Lamacchia here with Crush It In Real Estate, and I want to talk to you all about some major misconceptions that are going on there.
I hate to pick on a certain group, but I think it’s mostly agents that have been in the business less than four or five years, that have these delusional thoughts that if a home is on the market for 20 or 30 or 40 days and isn’t selling, that a buyer is going to come along and pay asking or pay over asking. We’re hearing these stories a lot and here’s what I want to talk to you about.
Let’s say a home is listed at 700,000. Day one, that’s what you have it listed at. If it doesn’t sell, the value doesn’t go up, the value– Look at the days on market, 1, 10, 20, 30, the value slowly does this, and as you get further along, the speed at which the value goes down increases. Here’s the fact, my friends, homes sell within 21 days of being listed or 21 days of a price adjustment.
In the way the market’s been in the last year and a half, that’s more of a historic statement. The way the market’s been in the last year and a half, homes are really selling within 10 days of being listed or 10 days of a price adjustment. By the time they change it, depending, it might be a little longer, but the point I’m getting at is that’s how the market moves. No buyer comes along and goes, “Wow, yes, I like this home a lot. How long has it been in the market?” “It’s been in the market 33 days. It hasn’t sold.” “Interesting. Can I offer 10,000 over asking?”
No buyer does that, and no good buyer’s agent is going to tell anyone to do that. If you’re a buyer’s agent and you’re doing what you should be doing, which is representing your buyer, you have a fiduciary duty to them. Your job is to negotiate the best deal for them. That’s what 99% of realtors out there are at least trying to do, then you should be trying to get your buyer a better price when you’re representing them, as sellers should be trying to get their seller a better price.
Here’s the problem, don’t take it too far, and don’t misguide your seller. If you’ve been in the business, one, two, three, four years, you haven’t witnessed what I refer to as a real market. We experienced a real market from about 2012, till about 2018, late 2018. That was a real market. It was more and more of a seller’s market as the years went on, but it was a real market. If you overpriced, you didn’t sell, you had to make an adjustment. There were some multiple offer situations, but it wasn’t on every single home. Buyers in more cases than now could negotiate.
What we’ve been in, in the last few years, especially the last 18 months since COVID happened, is what I refer to as fairy tale land. Everything that you list, sells immediately. The listing agent looks like the hero. You get to get your Facebook post saying, “Sold in six minutes,” and it makes you feel good. The truth is that’s because there’s a lack of supply and there’s extreme demand because rates went down, demand went up, and supply went down because of the pandemic, and then because of people being scared that they don’t know where they’re going to go.
When you are representing a seller, it is your job to advise your seller correctly. You can’t tell your seller, “Hey, I know we’ve been on the market 25 days and we haven’t sold, but let’s still counter 10,000 over asking.” You can tell them that if you want, but it’s likely not going to happen. Once in a blue moon, seasonality can cause some odd things to happen.
Mid-October tends to get slow as it did a couple of weeks ago, and then when it kicks back on, you might get lucky and sell a home around 20, 30 days, 40 days on market, but you’re not going to sell it for over asking if it’s been sitting, you’re not. You need to give your seller proper advice. Truth be told, the longer a property is on the market, the less it’s worth. That’s a fact. That’s been going on for 100 years.
Now, if you’re representing a buyer, you need to keep your buyer in check as well. Buyers, now they see a home sit in the market 10 days, and they think, “Oh my God, the market’s crashing. There it is. It’s crashing.” No, no, no, homes on the market 10 days, that doesn’t mean the market’s crashing. There’s a few more choices out there. There’s a few more choices, so buyers can move a little bit slower than they could in the spring.
Believe me when I tell you in three or four or five months, it’s going to be back to how it was. Probably not as bad, but we’re going to be back in a frenzy. Guide your buyers, teach them, do the best you can to save them money, but try to keep them realistic. My friends, the business we are in, the business of real estate is the business of feelings and emotions. That’s what we’re in. We’re in the people business.
It’s very easy for sellers to grandstand and “I want more and you should pay more.” It’s your job to obviously do the best you can to get your seller the most money, but to try to keep your seller realistic and educate them and show them data and get them to understand things. People take pride in their homes, as they should. Same goes in the buyers’ side. You too should try to keep your clients in check.
Remember the longer a home– Values don’t do this when homes are on the market a long time, they don’t go up, they go down. That’s just the way it works. I don’t care where you are in the country, where you are in the world, the longer something is for sale and it doesn’t sell, the less it’s worth. Thanks, my friends. Hope that makes sense. Happy home selling.