No matter what part of the world, when you talk about real estate, price is also the most sensitive issue, whether you represent the buyer or the seller. Agents around the globe often struggle with pricing recommendations, not because they do not know what the value is, but because their sellers want to push those limits. As an agent, when do you say when? When do you tell your client, the seller, that you cannot list the property at the price that he or she wants? And if you have already taken on the listing, at what point do you have the oh so uncomfortable conversation, making a recommendation to further adjust?
The answer to this question depends greatly on each individual market. In most US markets, the presence of an MLS and unified historical data truly takes the uncertainty out of the equation, and in most US markets, that process can take place very quickly as the rate of absorption is very high. In Costa Rica, with the lack of an MLS or any other centralized source of historical market data, sellers rely on their agent's knowledge of the market and depend on their insight to guide them through the process of selling their property. Prior to listing any property, making a price recommendation is part of our required work, as in the Costa Rica real estate market, sensitivity in pricing is critical to absorption. If a seller is in agreement with our recommendation, or perhaps slightly above our recommendation, we work for our sellers to try to maximize the dollar value of the sale, as their representative; that is our job. However, oftentimes, even at the recommended price, the market does not absorb, and it forces an agent to engage with the seller to make the necessary adjustment to procure an offer.
As an agent, however, having that conversation is often a cause of anxiety, as it will be the second time he/she has had to discuss what is rarely received with open arms. Let's face it, telling a seller that they are going to get less than what they expected on the sale of their home or property is not a pleasant discussion. However, this is the critical role of the agent. Our role is not to have easy conversations with our clients, as anyone can tell someone they are going to receive more money than they expected. That does not require expertise and market knowledge. However, an experienced agent must speak with authority, knowledge, and confidence about his or her recommendation, as sellers truly depend on us (especially in the Costa Rican market) to guide them through the process. While it may be an uncomfortable or uneasy conversation, if it is the right one, it is the duty of your agent to do just that. Certainly, in those conversations, an agent has to transmit with confidence the recommendation, but also ensure the seller that the purpose of the reduction is not to make his or her job easier, but rather to generate traffic, a sense of urgency, and demand to drive offers on the property. In real estate, a sense of urgency is what procures offers, and if the market has not come to a seller, the seller must come to the market.
In a recent transaction, this scenario was proven true as agent Steve Hooven had a spectacular listing in the ocean view community of Vista Tres Bahias within the Los Sueños Resort Community. It was a residential, ocean-view lot in the most exclusive community in the neighborhood. The owner had previously listed with another brokerage at a highly inflated price, and Steve worked with the seller on an initial price recommendation at a number that we felt was, albeit a little high, would be competitive in the market. After some time on the market, while there was interest, it was passive, and clearly, the price had not provoked that sense of urgency in the market. Steve had a call with the seller, pushing for a significant price reduction on the lot, explaining the current market comps, both sold and listing, and the conditions of the market. The client not only agreed with Steve but appreciated his proactive approach, and we moved forward with our price reduction.
Within 48 hours, our Escazu office presented the opportunity to several clients of the office, and procured two offers in that time period. The seller accepted the offer with the fewest contingencies, and the most efficient close, and the transaction was closed in less than 2 weeks from its price reduction.... The buyers were appreciative of our providing them with the opportunity, as an agent from our San Jose office was able to present them with this unique property, and the seller of this exclusive property was ecstatic with the quick results, the service, and attention to detail provided throughout the transaction, so much so that she sent Steve the following token of her appreciation.