You pay dearly.  I have always said that you pay more for bad advice than you do for good advice.

I once had a client call wanting to list his house.  We went over all of the comparable properties and we came to the conclusion that the property was worth $600,000.  He spoke to another Realtor who convinced him that his property was actually worth $800,000.  Because of the large difference in the two prices, he decided to list with the other agent because he did not want to miss out on $200,000.  

Unfortunately, their property is still listed today – only now they are priced at $550,000.  Not only does he not have his money, but he has now paid for the house to sit empty for over a year.

Another example, I had a $700,000 offer on a property I had listed.  The owners of the home said that they thought the market was turning around and they did not want to take the offer = they thought they could wait and get more money.  After the home sat on the market for a year after that, it sold for $620,000 – they lost $80,000 plus they had to pay to maintain the property for a year. 

As you can see, there are consequences to any decision you make - especially in real estate.

I was on a listing appointment this morning on Hilton Head and the owner of the property mentioned to me that the villa three doors down from hers was listed at $450,000.  I told her that it had just been reduced and she could not believe the new list price.  She said that the owners of this property had originally priced the villa so high that Realtors had lost interest – she thought that no one took them seriously.

She went on to say that if they had listed their villa at that price originally,  it probably would have sold in the first month.  There is a lot of truth in what she was saying – so many people chase the real estate market down – keeping them one step behind. 

This is a common mistake in real estate.  Don’t chase the market down; if you list your property for sale, price it where it will sell in today’s real estate market.

I was talking to my real estate coach this morning and he was telling me that when he meets people to talk to them about their property he asks if they would prefer he be honest with them now, or honest with them later.

Bill is referring to the fact that in a slow market, people have a hard time understanding what their property is worth.  Most people think their property is worth more than it will sell for in today’s market because their neighbor sold their home a year ago for a certain price.

People usually list their house for a price it won’t sell, the agents know the home won’t sell, and then six months later – they will adjust the price to sell.

I have lost a lot of business being honest with people.  I recently met with some clients and told them what their house would sell for in today’s real estate market.  Another Realtor came in and told them that it would sell for 20% more.  They listed it with that Realtor because 20% more was a lot of money.  My client gave this Realtor a try and after six months they adjusted the price and it sold.

A lot of real estate training programs teach you as an agent to give people an inflated value of their home so they will list it with you and then you can get them to reduce the price later and earn your commission that way.  Personally, that has never been an option for me because my mother did not train me that way.

I would love to hear from you – should I be honest now, or honest later?