Think Before you Reduce the Price of Your Home

Many people who are selling a home for the first time make the common mistake of assuming their realtor wants to sell their home for the highest price possible since their pay is based on commission. However, this is not always the case and here's why:

Real estate agents are in business for themselves and the company they work for. Just like any other business, they want to make as much profit as possible. The best way for them to do this is by selling homes quickly so that they can have more time to sell more homes. Think about it: Would they make more of a commission if they spent several months trying to sell a home at $500,000 or instead trying to sell the same home more quickly at $400,000 and then having more time to sell another similarly valued home at the same price? Ding ding...the second option would give them more of a commission.

We all know that the economy is bad right now and homes aren't selling that easily. Since the realtors still need to make a living, they're going to want to lower the prices on homes they're representing so that they will get sold sooner rather than later. This may be espeically true if the home is in a prosporous area but is not worth as much as other homes in that same area. Why would a realtor want to waste their time trying to sell a $500,000 home in a bad economy when they can focus more time and energy on the numerous other homes in the area that are worth $1 million+. Instead of focusing their effort on the $500,000 home, they'll try to practically give the thing away by lowering the price considerably.

If you are trying to sell a home, don't let the realtor convince you to lower the price without first doing your research. Get an appraisal. If the realtor is telling you to put the home on the market for much lower than the appraisal price, realize that they may not be looking out for your best interest. Also, be patient. Homes arent selling as easily right now but does that mean you're willing to let your home go for tens of thousands of dollars less than its worth? If you can, wait until the market picks back up.