If I’ve heard it once, I’ve heard it a bazzillion ( which according to encarta.com is an actual English word, but not a real number) times: “I want to leave a little room to negotiate in my listing price.”
I can provide statistical evidence that those who choose to list their home with “a little wiggle room” never have to worry about the grueling emotional task of negotiating a lower price- because they never sell.
In my world, the world of real estate, we have a classification of these types of listings: They are known as expireds and withdrawns. This usually means that they are priced out of reach of where the buyers are biting.
A quick look at the past 30 days from our Pagosa Springs MLS system reveals this truth. Our area has 1817 properties for sale; 108 of these went under contract; 62 went into settlement or were sold; 143 came off of the market by either expiring or being withdrawn. Twice as many properties came off of the market with unsuccessful sales than that closed. Granted, many of these properties were re-listed with another company, but it still points out that many sellers are expecting unrealistic returns on their real estate investments in the midst of a buyer’s market. Once the sellers have switched companies, it is almost always associated with a price improvement. In the words of Jerry Driesens “I want to be the last person to list your property, not the first.”
The sellers who choose to look at the market with discernment and realistically place their home in the market become “former” owners and move on with their lives. Many times to realize their investment profit and capitalize on great value by purchasing other properties in the current market. Here is a recent example:
I received a call from a client who wanted to “move” his property. During our discussion he said “this is the bottom of where I am willing to go”. Soon enough I found a buyer who like any consumer wanted to see some comparable sold homes before he purchased this one. At this point, when showing him comps, it was easy to realize the value based on those numbers. It was a realistic price, not a “steal”, but a fair market value. We did NOT negotiate a single penny. The buyer purchased at asking price because of the value. The property did not sale in the months before because their was “negotiating room” on top.
Leaving negotiating room when pricing is the same as placing your home on the top shelf of the candy isle just out of reach. It’s not that your home is not desirable, its just that buyers are deterred by all of the homes on the shelf right in front of there nose within easy reach. If you price right , actually you don’t have to come down at all. Many homes in our market are selling for the asking price. These are houses belonging to sellers who dared to meet the buyers in the market instead of hoping that the buyers would come up out of the market to make an offer.
Close doesn’t cut it in a competitive market. Close only counts in horseshoes and hand grenades. Forget about nudge room, fudge factor, or wiggle space. Place your property on the market at the right price- then hold your line. If a buyer wants closing costs- negotiate upward. There is always a good market in any market. This is found at the precise point where sellers focus on price and condition rather than a personal bottom line. Sometimes making several base hits is a lot better than a single home run.