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Seven Pricing Myths Sellers Shouldn’t Fall For

Posted On: October 1st, 2017 6:13PM



When it comes down to it, the most important advice a real estate agent can give sellers is how to price their home. No matter how beautiful or well-maintained a property may be, how many upgrades it has or how well it shows, if a home is not properly priced, it’s going to be a tough sell.

The battle for agents most often lies with aligning what sellers’ think their home is worth with its true market value.

These disparate realities can be difficult to merge when working with a seller to set a list price or on a price adjustment. Here are seven pricing myths that often get in the away.

1. It is better to price the home on the high side because the seller can always come down. If buyers are interested, they can make an offer.

Well, not quite. If a home is overpriced, a seller risks losing potential buyers who aren’t stretching their search into an uncomfortable price range.

The asking price sets the stage and may invite or dissuade buyers based on the dollar amount. Just as you would painstakingly prepare your home for sale, you never get a second chance to make a first impression price-wise.

2. If a home is priced just right, a seller risks leaving money on the table. 

Actually, the opposite is true. A well-priced home tends to generate a lot of interest and can result in multiple offers.

A shorter marketing span brings strong offers that could result in a home selling for over asking price.

Buyers are less likely to play “let’s make a deal” and nit-pick every little thing; they feel the urgency of competing with other interested parties for the same house.

3. The price gets better with time. If it doesn’t sell this time, the seller will get a better price by re-listing next spring, next summer, etc.

It has been said before, but it needs to be said again: A home that sits is not like fine wine — it does not get better with time.

The longer a home stays on the market, the more likely buyers are to question its value.

Subsequently, any offers that come in tend to be perceived as too low by an already-frustrated seller who thinks there weren’t any buyers for their home while it was on the market the first time.

Granted, some seasons can be better than others — and that really depends on where a home is geographically located.

Trying to attract maximum traffic in the dead of winter may not be the best strategy, but if priced aggressively, a seller may just get that serious buyer who is ready to close.

Waiting to re-list again may mean competing with other houses on the market that are both nicer and offer more bang for their buck.

The additional carrying costs of a mortgage, maintenance and upkeep as well as the possibility of needing to make repairs to an aging roof or AC system eat into the profitability of commanding a better price next year.

If the home is somewhat dated on the inside, price out the cost of replacing granite counters, updating appliances, repainting and other upgrades, and it will likely be much less expensive to adjust the price without as much hassle.

4. X price is as low as the seller will go.

When faced with an offer that is less than what they want, sellers love to draw a line in the sand and dig their heels in over an arbitrary number that they deem to be “their bottom line.”

Who decides what a property is ultimately worth anyway? Buyers see the glass as half empty versus half full, and in some markets and real estate cycles, they are holding the cards.

Sellers can decline an offer based on a number, but they may never get there with another buyer, and a subsequent offer may be lower or layered with conditions and complications.

5. An offer should come in close to asking price.

Sellers are often disappointed at the initial price when an offer is received and ask “why so low?”

Does a seller really think a buyer is going to be generous with their initial offer?

Unless it is a really hot property, priced aggressively or in a low-inventory market, no buyer is going to willingly offer more than they have to, especially on a first pass. They want to get a sense of the seller’s flexibility or lack thereof before deciding their next move.

6. Outdated features shouldn’t impact the selling price.

So the home has “upgrades” circa 1990 with white melamine cabinets, beveled edge laminate counters and builder grade 12-by-12-inch tile with brass fixtures, and the seller expects the buyer to pay full asking price or close to it?

Reality check!

The buyers are looking at how much they are going to have to spend to bring the home up to today’s standards and are going to deduct accordingly when formulating an offer.

7. The buyer’s offer is simply too far off the asking price to counter.  

A bird in the hand is worth two in the bush. A buyer has stepped up and put pen to the paper with a proposal. An offer is an invitation to negotiate and begin discussions about the property.

It can be easy to get offended, but it’s best to keep emotion out of negotiation as much as possible and work in good faith with what’s presented. A seller will learn quickly if it looks like a deal may come together.

Pricing a property is a delicate dance. The bottom line is that the market doesn’t guarantee as strong a price as sellers usually want or expect — unless the home is a highly sought after, rare type of property.

Setting the stage with the right pricing will often set the tone for how smoothly the listing experience will unfold.

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Here's What You Might Not Know About Credit Scores

Posted On: March 9th, 2017 7:55PM

For most of us, purchasing a home is the single biggest financial commitment we will ever make. A mortgage loan is probably the largest debt that we will ever take on.


This can be daunting! I know, I’ve been there.


Before applying for a home loan, it is important to know your credit situation. A lender will need to know how much you earn and how much debt you already have, to judge whether you are likely to repay the loan that the bank makes to you.


A common misconception is that a credit score, also called a FICO score (after the Fair Isaac Corporation, which designed the scoring system) is represented by a single number. Actually, there are over thirty different scoring methods.


The three companies that use some variation of the Fair Isaac model are Experian, Trans Union, and Equifax. However, even within these three companies, different scoring models will apply, depending whether one is applying for a credit card, a new vehicle loan, or a home loan.


Consumers may check their credit scores using a variety of sources, but this can be confusing. For example, the free website currently lists my credit score at 819. The site rates this score as “Excellent.” Great news for me, right?


But wait. My bank also provides a “Free Credit Score.” Here I am listed at 786. Still respectable, but not quite as good. And I have a Discover card, which also offers a “Free Credit Score” service. Here, my score is listed as 792, and on another free website,, my score is given as 778.

What’s going on? Two things.


First, the free websites like and do not provide actual FICO scores. Since the Fair Isaac scoring model is a proprietary system of the Fair Isaac Corporation, the best that these websites can offer is an approximation of your credit score, using their own scoring model. These scores are fairly reasonable guesses about your credit score, but they’re still guesses. Some people call these “FAKO” scores, since they’re not really based on the Fair Isaac scoring system that an actual lender will use. In spite of this, I have personally found that the scores found on such websites as and can be useful for knowing approximately where one’s credit stands.


However, if one is applying for a mortgage, he or she will want the most accurate information available. The website is the only online source I know that provides users with actual FICO scores from the three credit reporting bureaus, Trans Union, Equifax, and Experian. The site also shows scores using several different models. There is a fee to use this site; however, the scores shown are actual FICO scores.

Instead of thinking about your FICO score as a single number, think of it as a range. Find out if your scores fall generally within the “Poor,” “Good,” or “Excellent” ranges. You will find this more useful than knowing any single number.


You’ll also want to know the information contained within your credit report.


The single best source for credit information, in my opinion, is I would encourage any person considering applying for a home loan to visit this website and take a careful look at their credit report. This report contains more than just a number; all of your credit cards, student loans, car loans (if any), and other debt are shown here, along with your payment history. This is the hard information that a lender will look at very closely to determine whether you will qualify for a loan.


As you can see from the scores I shared above, my own credit looks very good. It is unlikely that I would be turned down by most lenders, whether applying for a credit card, a new vehicle loan, a new home loan, or a refinance of my existing home.



Keep debt low. Fair Isaac’s scoring model, as I mentioned before, is proprietary, and the company does not like to share its secrets. However, one thing that we do know is that approximately 30% of a FICO score depends on what percentage of your available credit you are using.


I use credit cards for almost all of my purchases. They are convenient, safer than carrying lots of cash around, and I love the fact that I have a record of all my purchases at the end of each month. Furthermore, all of these cards offer buyer protection to protect me in the event that I am sold a product or service I am not happy with, or if someone tries to make fraudulent purchases on one of my accounts. I have American Express, VISA, MasterCard, and Discover cards. Combined, the total credit line on all of my cards totals nearly $40,000.


Would I ever utilize all of that available credit? No way! For one thing, my credit line is nearly as much as my annual salary was when I worked as an elementary school teacher! To have credit card debt equivalent to my yearly gross income would give me nightmares – and it would hardly be a responsible thing to do!


In a typical month, the total debt on all of my credit cards combined would rarely exceed $1000. This would equal only 2.5% of my total credit limit. I’m well within the safe zone, as one can spend up to about 1/3 of one’s total available credit before it would have a significant negative effect on one’s score.


Also, unlike many people I know, I pay off my credit cards in full every month. I highly recommend doing this. Not only will you keep your debt manageable and avoid getting in over your head, you will also avoid paying hundreds, even thousands, of dollars in interest charges. And interest rates on credit cards are high!


Pay on Time. While there may be situations in which you cannot pay off your entire credit card bill at the time it is due, it is essential to make at least the minimum payment. I cannot overstate the importance of this! The FICO scoring model records payments made 30, 60, and 90 days late, with each of these shaving an increasing number of points off your credit score. And unfortunately, making a payment even one day after it is due will record on your credit report as 30 Days late. (Hardly seems fair, does it? It’s just that there is no category for “1-29 days late” under the Fair Isaac model. However, it is important to know that, in situations where you know you will have to make a late payment, most credit card companies will agree not to report it, IF you have not made any late payments in the past, AND you call to speak to them about the situation before the payment is due.)


Have a solid mix of different loans in your credit “portfolio.” This one is a bit tricky, and it represents a part of the Fair Isaac model that I don’t particularly like. Basically, a person with several different kinds of loans in his portfolio will have a higher credit score than one with only one kind of credit. So a person with a few credit cards, a line of credit at the veterinarian’s office, and an auto loan will have a higher score than one who has only credit cards. And homeowners will generally have a higher credit score than those who rent.


Here’s where you need to be careful: The act of applying for new credit will temporarily lower your credit score! While having a larger line of credit that you are not using will help your score in the long run, applying for new credit will hurt your score – at least temporarily.


Let’s say that you’ve just been pre-approved for a new home loan, based on the information in your credit portfolio. But the new house has the ugliest avocado green carpet you’ve ever seen throughout the ground floor. You and your spouse want that carpet out of there, and new carpet in place, before you move the first piece of furniture into your new home. A carpet store offers great financing terms for new wall-to-wall carpet. My advice? Don’t do it, at least not until after closing. Applying for a large loan could hurt your credit score, and even jeopardize the ultimate approval of your loan.


Also, if you have a credit card account you never use or have considered closing because you are not happy with it, it’s best not to close the account. Remember, any unused credit you have available to you helps your score!

Talk to a lender. This is the most important piece of advice I can give you. Many potential borrowers put this off. Maybe they’re embarrassed because they know their credit portfolio does not look as good as it might. Maybe they don’t even know what’s in their credit file, and don’t want to know. Maybe they’re afraid of rejection.


These are all natural and normal fears, and I completely understand them. I’ve been there myself.


I hope that two quotes from Cheryl Braunschweiger at NOVA Home Loans will help to put your mind at ease. I spoke to Cheryl in late October, 2016, and wrote this down to pass on to my clients and potential clients:

“We do not judge.”


“In about 90% of the cases where we have to tell someone that we can’t offer them a loan at this time, we can help them to make a plan so that we will be able to offer one at a later date.”


That should put your mind at ease!


Finally, if one lender says, “No,” don’t be afraid to talk to another lender. Different financial institutions have different criteria for determining the qualifications for getting a loan. Often credit unions have more lenient guidelines than banks. Shop around for the best interest rate! And remember, lending institutions are in the business of making loans; they’re looking for customers – certainly, customers who can and will repay their loans – but a reputable lender will look for ways to help you.


That’s what I do, too. I hope that you have found the information in this blog useful. Please call me any time if you have questions, if you are ready to buy or just thinking about it, or if you want to sell your house. I am here to help you!


Bradley R. Cook

Associate Broker

HomeSmart Realty Group


“Your Broker Next Door”

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