Saturday, June 14, 2008

"Correct Pricing Is The Only Answer"


A call from this LA Times article by Lew Sichelman to price homes to market.

In 2008?

Well, OK. Where the hell have these reporters been the last 2 years? Last 5 years?

Welcome back. Had enough of the cool-aid, heh?

Hmmm. This is all good advice for realtors, you know.
Make sure homesellers set the right price to begin with.

Howard Brinton, a sales trainer from Boulder, Colo., says too many agents let the market control them, instead of the other way around. An agent, he says, needs to be a counselor and educator as well as a salesperson.

"Pricing, specifically correct pricing, is the only answer for today's changing market and the most important thing a Realtor can do for his client," Brinton said.


But how ironic is it that only 18 months ago we had realtors and the N.A.R. prodding Americans to buy homes at higher and higher prices and they didn't see anything wrong or false about their counsel or educational acumen then?

But what do you expect when the earnings of a realtor is based up on either the sales value of the selling house or nothing at all?

Consumers must expect to get the shaft on the way up and now on the lovely way down.

If I want to build a new deck on my house, I might do it myself, but I might also decide to pay someone to do the work for me. I'll pay them for all the materials and the labor hours required to complete the construction, and I will review the work so that it meets the agreed specifications.

I could never imagine paying a contractor a percentage of the transaction or total value of the completed deck. No. I pay him directly an hourly rate for the work performed and for the wood, nails, glue, cement and treatment.

So it should be with home realtors.

I would pay a realtor $40 to $50/hr for the work they would do to find me a home to purchase in Lake Forest, California. But the idea that I as a consumer must pay a realtor $12,000 when buying a home purchase at $400,000 in value, but $22,500 for buying a $750,000 house just doesn't make any sense whatsoever. What on earth justifies the $10,500 additional commission? Are realtors using sales flyers made of platinum for the $750K house or something?

No. It doesn't make sense. Nothing does. And that's the problem.

I wouldn't pay the contractor more per hour to build a larger, more expensive deck, would I? No, I'd pay him his labor rate and for materials, but that's it.

I can't begin to imagine the anger that those who bought into the b.s. of realtors when the market was growing (unrealistically) at 15% in 2004 and now when selling have to take it up the tailpipe on "correctly" pricing the home they bought. Those that are foreclosing, wow, they've got to be really pissed off.

The advice above is sage. Want the housing crisis to be over tomorrow?

Buckle your seatbelt and then price your home to market. Then get ready for a wild ride.

1 comment:

Michael said...

I would happily accept $50/hour for my work. Find a realtor from a small firm with flexibilty, and make that offer, I think you would be surprised at how many would take you up on it.