Tom Kelly: Paying the price for failing to adjust

Ah, the failure to adjust …

I remember that experience – vividly. I committed that grievous error several years ago and found myself in the position of having to finance two homes at the same time because we bought our new home before selling our old home. Had I listened to my competent, veteran agent, I would have avoided many hurdles, an overlap of mortgages and one of the most trying, anxious times of my life.

And the anxiety did not come only from our dwindling financial picture. The worst part of the period was keeping both homes clean and the uncertainty of a potential sale. Should we move and try to sell an empty home? Would it be vandalized?

I can still remember my agent telling me, “You are the owner and you can do what you want, but the price you are setting is your price and not my price.”

I was stubborn because our former homes sold for prices we had put on them – which could have been lucky. But I’ve come to understand that one of the most important, and definitely the most underrated, services an agent performs for a client is setting the asking price.

Some homes never go on the market. They are priced right and frequently are sold by word of mouth. Others sit unsold for months. The differential between asking price and selling price depends on where you live and your expectations.

You probably are tired of hearing this, but a home will sell for what somebody will pay for it. That is a simple fact that sellers often underestimate. If a home is priced too high, it is not going to sell. You must keep it in the bracket the market can bear.

The average person usually sells only one or two homes in a lifetime. It is important to price them right for two reasons. First, the best market for a house is in the first three or four weeks. It usually does not pay to say, “We’ll bring the price down if it doesn’t sell” if you would be happy with the lower price anyway. When something’s fresh and priced right, it’s usually going to sell sooner than later.

Second, if the price is totally out of line, potential buyers have the tendency to dissect all of the home’s shortcomings. It’s human nature.

I thought about that mistake I made when I read about a top-producing agent who refused to accept a listing because the seller had priced her home unrealistically.

It had been quite a while since I’d heard of an agent turning down a listing – especially in the raging market of the past two years.

The best agent for you is not the one who comes in with the highest suggested asking price. In fact, be leery of any agent who comes in more than 20 percent higher than anybody else. Real estate advisers suggest choosing an agent with whom you feel comfortable and one who will do a thorough, professional job.

And pick a pro, not dollar signs. If the house sits on the market, nobody wins and the home artificially inflates the market. Keep in mind most real estate agents get paid only when a deal goes through. Interview at least three of them before you sign – even if you think you already have the agent who will best represent you.

I believe that a good agent earns a large proportion of a commission by producing an honest, informed selling price for the client. It’s worth that much in one or two (in my case, six) extra mortgage payments that have to be made if the house does not move.

Some people need a real estate agent and others do not. The average person does simply because most homeowners are not prepared for the tasks involved. They generally will overprice the place, handle advertising improperly, negotiate poorly and jeopardize a legally binding earnest-money agreement.

Nobody, however, needs an unrealistic price. Don’t take yourself out of the game by failing to adjust to the current pace.