About a year ago, I was talking to a fellow agent about how we run our businesses. Probably, that was my first mistake right then and there. (Just Kidding)...
However, I told that agent, no matter what I tell sellers when I look at their property, I could hit them in the head with the "TRUTH Sledgeahammer" all day long, a lot of them STILL opt to list with yet another agent, who agrees to list their home for "a little overpriced" and they wind up for the most part, either NOT selling their home, or accepting an even LOWER price than even I recommended, because after several months have passed, 19 open houses and weeks of NO Calls or activity, the sellers finally reduce the price and/or their agent FINALLY gets through to them, or sometimes FINALLY gets the courage to tell them the truth, at the risk of losing the listing.
Believe me, if the sellers won't bring the price down in this market, you really have nothing to lose, period.
So, against my better judgement, I decided to adopt a slightly "softened" version of my listing acceptance policy, one that I STILL TELL THE TRUTH, of course, but instead of turning down listings, to list them "a little overpriced", if the sellers really insist. And I mean REALLY!
This of course is ridiculous. With Zillow and so much information out there, buyers simply have so much to choose from. They won't waste their time with a seller, or agent, who's playing pricing games. Sellers are in competition for attention. I give sellers the best exposure I can; with an overpriced listing, all that's accomplished is .... NOTHING.
So, why would an agent overprice a listing today?
Two reasons I found.
#1. They are hoping a buyer candidate who doesn't know the price and hasn't studied the market will call, most likely from a sign call, appraisal be damned!
#2. They are hoping the seller will realize the price is too high and get desperate or realistic and reduce the price on their own. Of course they hope NOT to become another "expired" (failed to sell) statistic.
Well, I should've known.
None of my listings "expired".. I canceled them myself after repeated attempts to reduce the price. These sellers just don't want to "get it".. They'll keep "agent hopping" until they either change their mind or lower the price low enough to reality.
One reason I like listing short sales is they are REALISTICALLY priced. I'm NOT insulting the intelligence of today's average buyer.
So with this, I'm returning to my "tough as nails" policy. Maybe I won't get the listing, BUT the feeling you get knowing you stood your ground and acted like a TRUE professional, and turned down a listing that most likely won't sell, well, try it! I betcha you'll feel like a million bucks!
Sell your property yourself, while it is listed, and pay no commission! If you're not happy, fire me! You're in control!
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As soon as a prospective seller begins the conversation with "We can start by pricing it..." Our answer is that we hope to end where we start....we don't get every listing...we do sell every one we get !
Well, I can understand if you sold 50% of what you get; the problem is these overpriced listings take up SO much of your time and energy, not to mention money wasted. Even if an agent has "devious" reasons in terms of listing properties for buyers, the buyers today are "savvy" and simply won't waste their time. I don't blame them. I wouldn't too....There is NO measurable advantage to overpricing a listing in today's market. It is a TOTAL waste of time.
I turned down a listing yesterday! It felt wonderful! LOL!
The consumer has not the knowledge or market savvy to understand the pitfalls of trying to sell an overpriced property listing.
Agents know. Agents who rationalize an overpriced listing with "the seller wants" are simply "buying the listing".
As soon as the agent tries to get the seller to lower the price, that owner is going to believe that the agent has just stuck his/her hand in the owner's pocket and stolen money.
Private sales (non short sale or bank owned) don't just compete with each other. They also compete in price with the short sales and bank owned sales.
My honesty has cost me listings, but it has also allowed me to sleep at night! I don't have angry Sellers calling me wanting to know why their house hasn't sold.
We've learned the hard way not to take overpriced listings. Lenn above said it the best that the sellers think we're trying to take money from them by asking for a reduction. There are always agents in every market who will take an overpriced listing though, just not us, too much aggregation.
Jim, taking overpriced listings violates an agent's fiduciary responsibility to the seller. It just isn't good business.
Price, price, price. I loosened up for one listing this summer and continue to regret the decision. Have a happy Friday!
I have a range of values I offer at the listing presentation, all based on "real" data out of the MLS of course. It's our duty as agents to provide perspective, but our clients have the final say. If my sellers wish to price a little higher (whatever their rationale - even if it may not coincide with our experienced thinking), then I get them to agree to price reductions upfront. It's give and take on guidance and decision-making, and thus far I've not had an uncooperative seller.
Yes the old game, The Price is Wrong Right. Over pricing certainly does help any agents who work the expired listing market.
When you start out in real estate you tend to do anything to get the listing and that includes buying them, even though you don't realize what you are doing. I started out not doing this and lost loads of listings. I am stilled appalled today at how much of this goes on. One of my agents had a client that decided not to use her, used one of these agents that buy the listings. She offered 25% more on the sale price. They dropped the price multiple times, took a year to sell and at a function my agent attended with them, the seller owner was all but in tears for doing what he did. He paid the ultimate price on a home he did not even live in. A years worth of extra mortgage payments and carrying costs just to sell at what my agent told him a year before.
Most sellers think they know it all but they don't, yet they wont be told. It is tough to butt heads with these people. As for the agents, after 5 years I know them all.
Sellers can be a treat.....When you take an overpriced listing you will ultimatly make no money and pay the price of a complaining seller.....They tell everyone how worthless you were at selling their house.
Not worrth it...Better to be honest and tell the seller any agent that accepts their listing will just use the leads to sell the neighbors house...lol
I'm gonna turn them down. I can assure you, I tell them the truth like you won't believe. At the moment of decision, I had to make a business decision and judgment call. Some of these sellers just "Tune you out"... Trying for them isn't 14 days; it's much longer, and then they want you to "bleed" if you have to. I tell them about the Realtor code of ethics. These guys and gals seem to think otherwise.
Michaal, I actually show them THIS;
• Standard of Practice 1-3 Realtors®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.
They evidently WANT to work with unethical agents LOL
It's not unethical to list an overpriced listing IF you tell them the truth (I HAMMER it to them). That act in itself is a judgment call. The dishonesty comes with a "yes man" real estate agent who doesn't reinforce or even mention to the client sellers the price is overpriced. It's one thing to be wrong; that's forgivable and depending on the circumstances, maybe even understandable. It's dishonesty when agents aren't truthful.
Great post Jim, I am definitely not interested in over priced homes as new listings, it's always been a business decision for me and not a personal one. I try to educate sellers on the impact of over pricing a home so that they are aware of those consequences and if they are not willing to compromise then I make my decision based off that particular situation. Many times they claim they want to start high to leave room for negotiations and in return end up with countless DOM and in most cases end up selling for much less.
To me it seems like getting the seller over what they FEEL or BELIEVE the home is worth is the hard part. Sometimes even the numbers won't bring them around.
BTW - be sure to give credit to the Arnold picture in your blog. I'm gonna write a post about this soon. It's important to watch the copyright stuff on pics.
Have a good day!
We have all run into them..."my mind's made up don't confuse me with the details". But overpricing in the market is a disservice. In the posts someone talked abut taking a slightly overpriced and agreeing upfront to reduce the price at some point. Well and good BUT in a declining market the market is going slightly lower every day. Your price data is based on historical information... ergo the price may have already dropped from the data (may??? Probably!). So unless you carve out a really significant drop you will still be behind the gun...
In fairness we have all had overpriced...perhaps not intentionally but it does happen. The best approach is STAY IN CONTACT. The when you do go back and say oops you are not a stranger and the sellers undersand more.
Lots of sellers are in denial. As a Keller Williams Agent myself, I throw the Win-Win policy on the table. I tell them I WILL win because I will most likely pick up a buyer or two just from the yard sign...but they won't sell their house, and I'm NOT ok with that. Along with all my other truth serums...if they don't price it right from the start (I'm not a fan of price reductions either), I refuse the listing too.
Thanks everyone for your GREAT responses! I'm FLOORED!
And Bob, I took the "Arnold" picture out! Please send me a link to your post when you write it. I don't know how to "give credit"...
Jim
In today's economy, denial is the norm. I think most people still don't realize how profound of an effect the economy's downturn has had on the real estate market. If you are a stock investor, it's easy to see the new value, because it's spelled out exactly on the price of your stocks. With real estate it's much harder for sellers, because they don't have a clue to the value of their house until they sell it.
Most people are NOT real estate savvy. They have no clue how to figure out comparables. They do not understand why the 20k they just put on hardwoods and kitchen upgrades did not raise the value of their home by 20k. Agents are always there to help them understand this.
Unfortunately, the first agent trying to 'educate' them might get the short end of the stick. No one wants to accept bad news up front, but they won't have a problem a couple of months later when their frustration reaches a high point, and they finally come to grips with reality.
I think the key here is to always remember you're there to help them sell their house, to help them achieve that goal. If you can't do that because of something they choose to do, then they need to know why you're not going to do it, but to always leave your door open for them if they ever want to come back to someone who will be honest to them from the start.
Jim, look at my post (just above yours). I use pics from Flickr Creative Commons. It is easy to do and pics that are there can be used as long as you give credit. Look at the bottom of the blog for how to give credit.
Very Nice Jim! It's nice to see someone stick to what is correct. Here in the Keys we have so many agents that will just take a listing " To Get A Listing ". They list it at whatever the client wants instead of what the market value is, which is a real disservice to the customer and our industry! So Kudos to you!
I'm soooo inclined to agree with your position on overpriced listings! My philosophy is simple...if a home seller chooses to not listen to my professional advice, which is based upon daily market research and studying market statistics, then they're less likely to listen to me regarding other factors related to real estate. In the end, the marketing and management of my business will be spearheaded by someone who's not a real estate professional....why bother?
Jim,
It's not a good use of my time to take overpriced listings. I spend too much additional time trying to share other wisdom I know and if they won't listen on price, are they going to listen to those other tidbits of wisdom. I'd rather have homes I CAN sell in the next 60 days.
Even saying that, the market corrects you if aren't priced right even when you are trying to be, you are not getting showings or offers. I like my head above sand level:-)
All the best, Michelle
I'm feeling the pain right now. I have an overpriced listing and it is not going so well :)
I am getting ready to list a house that will be overpriced (at least that is the way it is looking right now). I ALWAYS suggest an appraisal right off the bat.
Jim
Everyone that responded has great input, but the best input I agree with is this:
If you take a higher priced listing - make them agree in 2-3 weeks that if there is no "serious buyer" then we lower the price to your recommended (CMA and data analyse) price - sign it...
I think buyers are MUCH MUCH MORE SAVVY than we believe them to be. Yes, they may use tools like zillow to come up with their pricing structure - but they are not stupid. They can read just like all of us, but the difference is we have analyzed the situation more deeply and thoroughly based on other criteria that they might not have had in the "Toolkit". Thanks for posting.
Great post Jim. There's an agent in my area that has a "tough as nails approach" in telling the truth and she's #2. People want to do business with her because they TRUST her!! Go for it.
Here is my opinion which I am sure will not be well received. There are many reasons to take a slightly over priced listing which never seems to be mentioned in any posts. I always present the cold hard facts however what about the seller who may be slightly over priced who is bringing money to the closing table to clear title? The seller who is just trying to pay back his/her mortgage? Or the home you consider priced right that needs costly repairs? Right you justify that by saying as reflected in the price or again walk away. What are you comparing to short sales, estate sales, REOs? What is your advise? Keep pushing clients to sell short if they don't have to or refuse listings? I wonder what you told these clients when you were selling them the home when times were good. Showing how home values would increase. Well they didn't and nobody expected the market to be where it is. I am not buying listings or violating ethics, I show all the facts, but I am also not going to turn my back on them. I will do my best and market the home just the same as any other listing. I don't think all sellers are being greedy or refusing to listen. Your point about the home not selling maybe justified but with the price reductions lately your priced right listings just may become the over priced one in the future. It is not about our reputation with other agents or the quick sale. It is about providing the best service for our clients. I find if you are honest about what the seller should expect at their offering price you don't have angry sellers. I have much bigger challenges ahead when listing slightly over priced homes, key word slightly, than continually reading not to do it or turning them away. It is about them not me. I find it hard to believe that you never take over priced listings or is it just not worth your time unless the home is multi-million dollar listing. Sometimes in the end it works out. The comment may seem harsh but it has just be building up.
I'd prefer not to take a listing if the seller isn't willing to be realistic. I've found that regardless of how cooperative they say they will be regarding price reductions, when the time comes to lower the price......cooperation seems to have gone out the window! It's better to start out at the right price and get the property SOLD....that's the end goal anyway!
The truth hammer is necessary. I usually send them a thank you note and in the note say, "if you reconsider and want to list your home at $xxx, I will be glad to help you."
Jim,
In a soft market such as this taking an over-priced listing is just a waste of money and time.
Good post Jim. Your recommended list price on a home can be hard, especially in this market, to tell a seller. We just have to stick to our guns and explain that pricing the home correctly is what is going to get it sold.
If I were a candidate for a PhD in Psychology I would write my thesis on this very subject. Pricing a home, as far as the homeowner is concerned, is 100% psychological. They often drop all sense of reality and act purely on instinct.
Hi Jim, I've changed my strategy somewhat also. If we can't agree on price I make them commit to a timeline based on activity, comps and attendance at open houses.
Your approach will certainly give you less headaches in the long run, but from time to time when you run across a listing that you would really like to have but the pricing will be a little high then there might be some short term disappointment.
Your post was timely, I just rid of an overpriced listing!
There's also another danger to overpricing the property to begin with - when the price is finally adjusted, a buyer might think there was something wrong with the house from the beginning.
If the home is originally listed too high, it will obviously linger on the market for a long time. When the seller (or even the listing agent) finally realizes the price is too high, they'll then lower the price, perhaps in small increments until they start getting bites. However, if this game goes on too long, you could end up in a situation I recently encountered - a buyer wants to know why the home has been on the market for so long and they may even think something's wrong with the home, so they won't even consider going to look at it. I can't blame them - for all they know, other people have placed offers on the home and maybe something appeared at the home inspection to cause the deal to fall through. At least that's their reasoning and I can see some truth in it.
-TMC
Tim Cahill
MBA, Certified EcoBroker, Realtor
Web site: CyberGreenRealty | Blog: Home Green Home
T: 617.599.2775
E: timcahill@avenue3re.com
I agree with you and I DO feel like a million bucks! I know that if I tell the turth, it is better to let them find out on their own. Being the next agent is best in those cases anyway. Then they are ready to listen!
Corinne (Post#10) nailed it, it is truly sad how many agents will buy the listing. Fully knowing they are being dishonest with their soon to be client.
The MLS is full of them -all over the country. My heart aches for some of these older people (we have a big portion of the population in our county over 65) that they had a sizeable amount of equity in their homes only to discover that a big chunk of it has disappeared. But I'm not doing them any favors to list it for a price that will not sell.
I walked away from a listing where the seller wanted $300,000 more than I recommended. I told him I could never sell it at that price. Yep, next agent in the door listed it. We'll see how that works out.
love the hassle free listing..
here's the hassle free part... price it right and selling it's no hassle for me!
Jim I too like short sales from the aspect of no BS when it comes to pricing. They are for the most part always priced right and the sellers understand the process.
I'm honest with sellers, and do my best to suggest a realistic price based on comps and market conditions. I give it to them straight. It doesn't always win me listings, but it sure does save a lot of time if they've got their heart set on a higher price.
Thanks for the informative post. As a North Texas Home Inspector, we loose home inspection jobs several times each week due to the appraisal. Do sellers not get it or what?
I am also very blunt and honest regarding pricing. I go the extra mile to show stats, trends, etc.. for our changing market to try and educate them the best I can. Depending on the list price, I will try to have the seller already agree to a price change in 30 days if I feel they are pushing their luck with an optomistic price.
There is a phenomenon where Sellers naturally think their property is worth more than it is. MIT did a study and I read the term here on AR a couple of months ago. It goes against their grain to come down to a moe reasonable price.
Some times it's best to be the 2nd REALTOR® - by this time, they are more willing to price the home correctly.
I also do not want to take listings that can't sell because they are over-priced. I'm working with a client right now that insisted on over-pricing the house. Needless to say, it's been on the market 3 weeks with no showings.
An overpriced listing may be a sign of a future short sale or foreclosure. Always ask the seller how much they owe. If the overpricing is a result of an insurmountable loan balance, you need to discuss a short sale or refer to a short sale Realtor. Make sure to emphasize to the seller that the market will pay what the market will pay, regardless of their loan balance.
I just decided that I did not want an overpriced listing and yes another agent has graciously accepted it - I would rather spend my time and energy with listings that will sell- because they are priced right!!!!!
I use a couple strategies to combat sellers you have described. I have them commit to an action plan/timeline up front and/or I take a fairly sizable non-refundable retainer up front (.5-1%) that will be credited back to them at closing when the house sells. If they want to overprice, they have to have some skin in the game. If they list at my price, no retainer :-)
After having a seller develop a very convenient memory block, I'll spare you the details. He listed too high, wanted to go even higher & I refused. We settled on too high of a list price. 3 years later it sold at the exact price I had told him it was worth in the first place. He called up accusing me of listing it too high & I had to remind him of the actual listing scenario. Needless to say, I'm not going there again. I sat down and created a form that I present along with the listing papers. It spells out the recommended listing price range & anticipated sale price. It has a second paragraph that states "after reviewing the information above the seller chooses to list at $?????. They then sign the form. If they have listed outside my suggested price range, I can stick this paper under their nose later and remind them that it was their choice and they went against my suggested pricing by listing higher. Shuts down their argument pretty quick!
So many great post.
Thank s to all for sharing.
I take it on a case by case basis. If I believe the seller is earnest in wishing to get his/her home sold, and we have gone over the pricing in detail but will still insist on pricing it too high, then I will take the listing. But, the seller is under the full understanding that the property is priced to high. I do keep them informed on what is selling around them so that they see that people are purchasing other properties just like theirs but at lower prices. Usually this does take an affect after a couple of homes have sold that could have been their home. Sometimes a seller just needs the proof that people will choose another home over theirs because it is priced right and they will request a price reduction. I will say that there have been times where I have turned down a listing because it was just way out of the park and I knew that the seller was just being greedy...not motivated to sell. I had one listing I turned down because the guy wanted me to list it at $75000. Because of the shape it was in, he was going to be lucky to get $55000. In this instance it was greed. He didn't owe anything on the property. His thought process was that in 10 years it would be worth $90000 therefore he had to sell it for $75000 now. He must not have gotten any other agents to agree either because the house is a for sale by owner now.
I guess these sellers are planning on selling to a cash buyer?
A good way to test out the seller's willingness to reduce a listing that you feel is overpriced is to get them to sign a modification of terms addendum dated 3 weeks out, if you've had no offers (or showings) in that first few weeks. If they're not willing to do that, they won't be willing to make the necessary reduction when you approach them. Then you can turn down the listing and feel ok about it.
Most of us have indeed been there and done that at one time or another. It costs to much to do business today and it's only going to get worse. I the seller is thinking more than 5-8% above market just so they have "room to negotiate" we all need to just say NO. Let them go FSBO for a while until reality sets in.
I like the form Jeff uses (#52). I'm trying to get EVERYTHING in writing these days. Lucky for me, my new listing is with folks who took care of getting the house ready and did a great job and are going to be wonderful clients.
I have been through a similiar issue and wasted a lot of time and money. I do not want to comment too much as the home is still on the market with another agent.
I think what we should also think about it is how much of our/your money did it take to 'carry' that unsellable home? It always costs money, time, effort. Everyone is loosing & I can't afford to throw money out the window or anyone else's window on a home that doesn't have a chance in hades to sell.
"If we could just find one dope to buy your house that doesn't care if he overpays ........"
I do not like taking an overpriced listing at all. I am very honest with all my sellers and show them all the facts. But the bottom line is, they are the ones who are hiring us. They are the ones who pay us. Perhaps if the overall commission paid was not so high on the sellers end, they may be more willing to hear what we have to say.
If we get 5-6% on a $200,000 sale and the seller owes 180,000, our commission is $10,000 -12,000. Add another $2000 for closing costs and then X amount of dollars for property taxes and you can see why they want to overprice.
We understand how a commission is broken down, but the sellers do not. They have lived there for years, made improvements, created great memories there and we are going to make more than them?
I get why they want to overprice. Do I like it from my perspective? No. But I do understand why they want to do so and I will extend them that right even though I know it is going to take more time and cost me more in the end.
Hi Jim,
fantastic post!
I agree with everyone of you....Karen #57 and Vanessa #21 additionally made good points....
I personally and especially lately decided, to listen more to my sub-conscious mind....if the seller is not realistic in their approach, like Kathy #4 'sleep peacefully at night' and Lisa #8 create 'perspective', Terry #30 'waste of time and money'....
I feel that we all accumulate far too much baggage on our souls, either on emotional and or economical matter, and our journey is being dramatically traumatised by unrealistic expectations....
While I agree to duty of care, accountability, passion, loyalty and empathy it should be both ways...on the trenches of life I also encountered some unforgettable dramas...so it feels good to have a buddy to share with, to create new flexible strategies to soldier on.
Best from Peter Michelbach, Perth, W.Australia
P.S. If anyone is keen to know more about 'our ways down under' please mail me: abc88@peope.net.au
Well, since taking an over priced listing, without making sure the owner knows the truth, is against both the law and the Realtor's Code of Ethics...I guess its not a problem, then. Full disclosure seems to be the legal key.
I tell the absolute truth with the comps and if the seller chooses to "test the waters", I make sure they know the possible result of the "water test", then proceed with the listing.
I like the term, "Seller agrees to reduce the lised price 5%, monthly, until the property is sold", suggested by another Realtor on AR a week or so ago. I guess within a couple of months a listing would bee within the sale striking range and the seller would be more educated about pricing.
It's hard to convince home owners who just put in a large sum into updating their home that they won't get their money out, especially in this market. Their home may sell faster than others, but still have to price within what is normal for the neighborhood. Thanks for your post.
Lydia
I personally don't want to take any overpriced listings, but I do not think that short sales and foreclosure pricing is realistic or doing the market any good. I am thorough in my research for CMA's and let the prospects know where I get all my facts, not just one source.
They look at the data and it's up to them to decide whether it's a good time to sell or not...
When the appraiser arrives, I am ready and prepared to either agree with the valuation, or challenge it. If the appraiser has included any foreclosures or short sales I'm now prepared to have that discussion too.
Jim,
A little story..... I showed an OVERPRICED Listing last weekend. I showed the Buyers the comps for those units. They made a realistic offer. The Seller turned it down ...2 different times! The Seller accepted their full price offer. This property was the ONLY ONE listed that met the Buyers needs! (Buyers are getting a very tiny loan; they ARE NOT worried about it appraising!) It's a great unit and they love it! And I think that's what is important!
I give up on trying to figure Buyers & Sellers out!
So, a seller hires you to sell his property when you know the asking price is too high, so as a professional, you take the listing regardless since you will reduce the price in stages and hope to sell it someday? Now, which is more compelling to witness, a listing that attracts buyers or a listing that buyers avoid?
When buyers see sellers reducing their prices, why would they make an offer, would you or would you simply wait and watch the price go even lower and lower? Why would a buyers agent consider any over priced property with an abundant inventory? I've discovered that in sales you are either a professional or an order taker and if you are successful, you know the difference, even if you describe yourself as a professional, don't you?
Finally if you can't persuade a seller to accept your recommendations, how effective will you be in negotiating with a buyer? It takes ACTION to attract buyers and unfortunately during this economy, an attractive price is essential, isn't it?
The sledge hammer I'm finding lately is the "condition" of the house. People want the top price, but don't even want to clean up the kitchen countertops. These sellers usually tend to decide not to sell, once they wake up and smell the coffee.
I've got a page full of notes from this post, thanks!
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Hi Jim,
Its great to know I am not alone.
I wrote a blog titled 'Self Deception Man's Greatest Affliction'it was based on those owners who bought during 2005-2008 trying to sell their homes most FSBO.
But this affliction also seems prevalent among many sellers no matter their equity situation.
Just a Sample of what I hear when I just question a homeowner's list price: [G rated samples]
My house is Special.
I am not going to give away my house.
I spent x amount of dollars in upgrades AND I WANT MY MONEY BACK
I need this much money to buy another house etc.
Who are you to tell me what my house is worth, you don't understand my situation.
Those 10 comparable homes in my neighborhood that sold for 40k less weren't as nice or the owners were idiots to sell so cheap
I have tried in many ways to be of assistance, I have adjusted my presentation, approach, I have givin them proof in real time and handed them well reported research, I have appealed to logic and reason but to no avail
My results have been from 'We don't need your stinkin help' to some very abusive behavior directed at me; also just being ignored.
It is similar to dealing with an Addict in the depths of Self Deception
The only treatment is Acceptance but in my experience it can't be induced those who suffer must hit a bottom first; usually 18 months on the market and 3 agents:)
Phil
PS;
Tammy I understand your point but in my neck of the woods overpriced listings don't sale they end up expired or withdrawn.
They blame the Agent, Market or both. No commision is paid
no house is sold but an extra 6-12 months of interest and taxes are paid and a lot of time money and energy has been spent by Agent.
Even if after 6-9 months owners come around and drop price it most likely will be with 2nd or 3rd agent. No matter agent owners still lose because it will be sold at 5-10% lower than what home would have got priced right from start; plus interest etc and agravation/inconvenience it is always a lose-lose situation with overpricing.
Owners may not say anything to Agents face but will blast them to friends and other agents they come into contact about their incompetence. I hear it often and other Agents know who you are also don't kid yourselves.
I've lost listings on the pricing game recently. I've learned my lesson: no more overpriced listings!
I actually do the CMA with my clients watching me- I know most people think that is crazy... but it works... If they do not agree with me then I will not take the listing- because we are clearly looking at the same information... I even had a seller ask me if we could just try it- $35,000.00 higher than what I thought would be a generous offer... I explained to him that just trying it for him- entailed about 25 hours of work for me that I do not get paid on... I left on wonderful terms with the seller and also sent him to a new agent that would have more time and could benefit from some exposure... AND- I get the referral on the listing if in the small chance it does sell.. - I doubt it at that price.... but it could happen.
Turning down a listing may not be the easist thing to do but 9 out of 10 times it is the wisest to do. And less expensive.
Ty
We all deal with overpricing. I have written price reductions into my listing contract.
If by date (3 weeks out) we do not have any private showings/ofer the price of "X" will be in affect.
Date (6 wks out) the price is reduced to "X"
Date (2 months out) the price will be "X"
This give the client a fell of control and it gives me a peice of mind that I do not have to have the "TALK" as often. It works with some clients.
Great post and great comments. There is such value in each of them. As an agent, it is my responsibility to inform the sellers of the home selling process, which includes many of the tips and tactics stated in the comments above. I truly "hammer" the point that the bank's appraisal must meet or exceed the purchase price offer, and if it doesn't, I explain all the options available to them...come up with the difference at the closing table, reduce the selling price to meet the appraisal price, or cancel the purchase offer contract. I never, however, lose sight of what their needs and expectations are.
I agree overpricing is one of the worst things we can do to our Clients.......the other one is underpricing. I find this market to be very hard to get the "right" price. How do you know you have priced a property....if it sells in a day?.....if you get multiple offers?....it sells within the Average DOM for category?
Overpricing a home is a waste of the sellers time and the list agents time and who wants thier time wasted.