This is a good way of getting phone calls. I know over priced homes have always been a good source of leads. I just put the sign up until they realize they need to lower it. The form is great.
There was a blog the other day which talked about overpriced listings. I posted a reply...and at the request of a fellow AR member, I'm posting that response as its very own blog. Hopefully, it'll offer some of you a new (and hopefully interesting and effective) way to handle those overpriced listing situations everyone seems to be running into lately.
All of us know too well that many, many agents will take overpriced listings as "business generators". They feel that at least they'll have a sign in the yard for the whole neighborhood to see!! Maybe it'll look like they're actually doing business, when in actuality all they're really doing is what ANYONE with a license could do. Does that make them a good or bad Realtor? Is it wrong??
That's a tough question.
It's a fact that sign calls can convert into real transactions, even when the resulting sales are NOT on the subject property. That can be a good thing, right?? It simply becomes a loss-leader. You know you might not make any money on the overpriced listing...but perhaps you can parlay an interested buyer into another home?
Car dealers do it all the time. Price one car at cost or wholesale...and generate a lot of foot traffic off the ad. Tell everyone the car was sold that morning, but "here's one you might be interested in!"
Or...you can refuse to take the listing. But should you??
When I sold real estate, I did a bit of a "hybrid" approach. I had watched several listing opportunities fall by the wayside when I refused to list at the price the sellers wanted. Then, I sat on the sidelines, and watched as "ABC Realtors" took the listing. There was a sense of "justice" when the property didn't sell for three months. And then, the unthinkable happened!! The sellers reduced the price, and the listing soon showed up on the MLS as "Pending". Thirty days later it closed for $499,900 (the sellers originally listed at $579,900) Grrr!!! Some other agent just made $XX,XXX dollars in commission!!!! I hated that!!
So, I vowed to never let it happen again. But how would I accomplish that without losing all sense of self-worth or integrity?? Well...it came to me....and here's an illustration of how I handled those situations from then on.
If my sellers wanted to list at $399,900, but the property only comped at $349,900, here's what I would do.
I created a form that I had them sign. The form stated that it was my professional opinion that their property value did not exceed $349,900. BUT...that I'd be willing to list and fully market their home under the following conditions:
1.) They needed to acknowledge that we MIGHT only be marketing their home to 3% of the general public (the percent of buyers who pay cash), as the other 97% required financing...and that the actual value would be dictated by the appraisal required on the new loan.
NOTE: This was a perfect time to suggest that they purchase a certified appraisal to determine value. We could also then market the home stating "Appraisal already in at $_____________". Historically, offers will come in at 97-100% of value in those circumstances, versus 90-95% of value on initial offers for properties without an appraisal.
2.) They understand that most experienced Realtors who show property in that particular neighborhood are very familiar with the area's values...so the seller had to acknowledge that they're aware the property may not be shown often (and consequently the marketing timeframe would be extended.)
3.) Sellers had to acknowledge that payments on their existing home loan would continue throughout the marketing period. If we didn't sell their home for 4 months during the "overpriced stage", they'd have to initial where it said the inactivity could result in additional mortgage payments of: $________________ X _______ months. An example might be $2,300 x 4 months = $9,200.00
NOTE: You could often get them to immediately lower the price by $10,000 with that alone!
4.) If after a specified period of time passes (in my case, usually 60 days)...they acknowledged that a price adjustment may be necessary. I'd explain that we'd re-research the market conditions at that time, and take into consideration any increases or decreases in housing values throughout the neighborhood, and re-price the home accordingly.
What you, as the Realtor, get out of it....is preservation of your professionalism. You also get at least 60 days of business generation from the sign...and/or any internet traffic. You lay the groundwork for the inevitable price adjustment to actual value...and you get name recognition in the neighborhood, which always gave me the opportunity to door-knock and hand out the most impressive listing brochures the surrounding sellers had ever seen!!! I could also take those opportunities to explain to the surrounding neighbors that we had priced the home a bit high during the initial marketing phase...but would make whatever adjustments may be deemed necessary in order to sell the home. That usually covered my rear end if neighbors saw that the house hadn't sold yet!!
It worked every time...and my integrity remained intact. And ABC Realty didn't get the commission.
I am a real estate agent in Port Saint Lucie Florida. I started over three years ago in a Local Rental office as a receptionist. I found I liked the business so I got my license. I saw an immediate change in how I was treated in the "office" . I could not longer answer the phone because people thought I was going to steal leads. Even though I worked honestly for them for over a year. I changed to an office that taught by motivating you and teaching about getting listings. I stayed as long as I could because the market was changing and no leads were coming and people stopped buying. I could not afford the desk fee's. So I changed and went back to a local office that is property management. My thoughts were that people were renting. Unfortunately when you split a rental it about pays for your gas if it is an inside rental. It's like delivering pizza's. The car breaks and the the gas is expensive.
Now the listings I did acquire were suffering because they were upside down and Brokers do not like to advertise overpriced listings. So basically my listings were worthless to this Broker and my clients did not like this. They lost respect for me and My Broker got complaints from them that I was not doing my job that I promised. Unfortunately I made those promises when I was with the motivational company that made me feel invincible. Which is dangerous,
Now I have mad clients and a non supportive Competing Broker. Every man for himself attitude and no one can question the Broker or disobey ( or leads and floor time is taken away). Basically treated like an employee and with no say in anything.
Are there any Brokers that respect agents? Is it the advertising cost "the bottom line" that make the agent and if you pay your own advertising and get your own leads you get a higher split? I think if you have advertising money that is what it takes. But remember being a broker advertising is what you do to get 30 to 50 percent of an agents commission and that , in some cases, is alot of money. But some brokers seem to think you can't make any waves or thoughts, you do as your told. Also you get the leftover leads if they compete.
I agree with the philosophy that you have to learn to make your own leads or the Broker does own your soul. I might get my Brokers License just to get out of this cycle. But hopefully I have learned what not to be from example.
Brokers forget Agents are not employee's and get no hourly pay to sit in the office. So if we get the crumbs and no leads or only left over leads, we will never make any money in that office. If they take the big sales and rentals the other agents are just drivers and door openers
I am tired , hurt and mad at the real estate business and the mortgage companies that made us look like monsters with the arms where people are paying over 2000.00 for payments on two loans and arms that are out of control. We did not twist the Buyers arms to buy the homes. At least I did not.
I have been accused of trying to pressure a relative to take a loan from a Mortgage Broker and a relative said I did something illegal by being part of trying to get my relative a home and the loan was an arm. The house was a good deal and still is (unfortunately many foreclosures and other peoples bad investments are Good Buys right now), but I was trying to tell them the house was a good deal and the Mortgage Broker was saying he could refi it before it got bad. But now we see the Mortgage Brokers did not keep their word and it made me look very bad. My relative did not get the good deal but in this case was right about the loan. I feel it ruined my relationship with my family. I have learned not to get involved with the mortgage process. But that makes the consumer in charge and the Buyers have to really check out the mortgage broker on their own. I might get a rider advising them of that.
I am wondering if after such a rocky ride financially and the bad press if real estate agents can recover and what company supports agents and does not take the " I am Broker you are Nothing" attitude. And Mortgage Brokers will be honest with the chances of the refi never happening. Will Buyers and Sellers ever trust us again? If they won't try how can Real Estate continue in the same framework of Brokers and Agents. Only the Brokers are making any money like a pyramid.
What company do you feel is the best when it comes to real estate, education, mentoring and respect? I need to hear from agents. Is A Brand Name better because they treat everyone the same and there is not a Broker on site in many cases. Or is Mom and Pop better? Mom and Pop tend to treat you like their kids though, even though you may be the same age and have a good client base. I think the Broker should know the 475 and not just quote a few words. If you read it you would see most agents are not treated like the statute states they should. If you want the big cut from the agents know the laws of being a Broker. Many Brokers would be surprised and how many infractions they have done and are doing.
I have been spending most of my time renting homes that were bought in the big bubble. Most people moved out of these homes and are trying to stay alive by short sales, foreclosures or renting them at half the payment of the mortgage. Most people do not want to bother with taxes and homeowners in Florida. Who will buy now ? I don't think investors are ready, It looks like the only buyers are banks. If the banks own most of the homes and rent them out how will the market stabilize?
I see builders building cheaper homes and competing with the banks low prices of the bigger homes, that have lost value because of them having renters. Will we go to less expensive homes and will the government lower taxes and make home owners insurance affordable, or is this impossible?
What will real estate agents do with the listings that will not sell? Do you still advertise them and market them? It gets very expensive to market an overpriced home.
Can the seller make Charitable Contributions by selling them at a lower price to first time buyers or single parents? I think that would be great, it would be win win. But the Government might see this as too easy. They would rather have the sellers go bankrupt and the buyers with less money live in substandard homes or no homes. House-less vs Homeless. What is the main difference? House-less can stay with a friend until things get better. The Homeless has been shunned by family and might say that the family has disowned them. They have no where to go as far as I can see. When no one reaches out you go numb and they give up. The house-less are not there as of yet but if we do not do something about them it might turn into a homeless scenario.
I spend my days now just finding homes for house-less people, I have not been selling alot of homes. Buyers are usually looking at high prices homes because they have not been effected as much as the middle to lower class in this mortgage nightmare.
I hope we can sell homes to families again one day and there will be a mortgage system in place that helps with the high costs of taxes and insurance. No one wants a free ticket , just a chance to own a home as far as I can see.
If any programs come out to help the displaced families that are renting because the home they had has been foreclosed on or they have had to leave their homes please let me know. I have alot of people asking for help even in rentals. First, Last and Security is alot of money for most people.
Thanks
Melissa Langridge
Gary Jules' Song Mad World and pictures of homeless people ...very sad i hope you like it
I recently had an experience of trying to find a rental property for a paraplegic in a wheelchair. He was on a fixed income and Had an Organization helping him with first and last. I was amazed at the Home Owners lack of caring. They did everything they could not to rent to this man and his 72 year old mother, who takes care of him. The Owners would not let him bring his working dogs, or let him , at his own expense, make a ramp to get in the door. I searched for handicap rentals and there were none in Port Saint Lucie, Florida. I can not stress enough to agents and Owners Please try to think "if that were you". I took other clients out the next day that were not handicap and the Owners were even going down on the listed price.. You would think it would be the opposite way around. This is not the way Real Estate is suppose to be. I read a prayer in my grandfathers prayer book, that was many years old and tattered. In it the Prayer went
"Cities are for needs and wants, that can not be met in isolation. Have we expected from them too much? Spur us to renew our cities as the earth is renewed in the spring, that families may have decent living space, that the poor may have hope fulfilled, that the sick and aged may be treated like persons. May our cities be filled with love, truly homes and not mearly structures."
The Christophers wrote this. The prayers were sanctioned by the Vatican, and copyrighted and edited by Rev Maurus Fitzgarald O.F.M.
It is amazing that you can read something old that fits in modern day so well.
I have lived in Florida since 1984, and have seen hurricanes come and go. The last three were the most intense, Frances hit on my husbands birthday, Jeanne hit on my birthday, and Wilma was a surprise.
What most insurance companies have done is made "frame" homes twice as expensive to insure. So even if this beautiful frame or fame stucco house 3/2/2 is on 1/2 acre lot and going for under 190,000 you can't give it away. I think the homes are harder to sell because of insurance companies and taxes so the state should make CBS homes tax's higher and give the frame homes a break. None of my frame homes have even had a showing. Most people bought them in the 1980's and want to make some profit to move, but they have to give them to the bank or lose and pay at the table. Most took refi's on them in 2005 and 2006 because banks made it so easy and they stripped their equity. So now the problem with the owners making any money is worse.
The hurricanes did this to the frame homes and people want to sell them. So now everyone is scrambling to get rid of the homes before another hurricane hits the treasure coast of Florida.
But how do you market these? There is no "win win". If you're the original deed holder your taxes did not go up but if you sell it the new owner has a big surprise. From maybe 500.00 to 3000.00.
This is an unfair practice when it comes to taxes and insurance for frame homes. They get no breaks and the cbs home builders are making a mint. And they are making them cheap so we will see lots of cracks in the foundations and the roofs will fly off just like a frame, but that is what it is going to take to show the insurance companies and buyers frame homes are as safe as CBS, unfortunately.
No investors will even buy them. So who will? I am hoping some Florida people who know this is a way to get a good buy and you will be just as safe as your neighbor in a cheap CBS.
I would think Florida is not the only state having this problem, Are any of you marketing hurricane friendly homes in hurricane season?
The market has so many homes that were bought at 100% financing and now the payments and taxes are sky rocketing. They turn to us to sell their home so they can hopefully not foreclose. I find the sellers want us to lower our commission and cut costs but still sell the home. If by chance you find a buyer, the sale is very fragile until the day of closing. The mortgage brokers will give a denial of a loan without a real denial if the customer wants out. I find this disturbing. The Buyers even want it all, they want the seller to pay closing costs and put 500.00 down. Well no more for me. I thought because it was being bought through a community program I was safe, but no it fell a day before closing. I had a commitment and a HUD and the buyer still got a denial.
Advertising is a problem when you are not getting high commissions. Thank goodness for blogs and the internet or I would be sunk. It still cost money and time. And that is another thing the buyers and sellers have to realize our time is worth something, we trained and pay dues for the business, they should realize we need to make a living.
Maybe if I blog enough, the buyers and sellers will see we are worth the money and not go to discount brokers that will end up costing them just as much. The upfront money then the signage and advertising costs the buyers money. The do it your self sell seems to be just a mortgage company with CSR's to cold call for the company. Most of the time there is not even a real estate agent involved. If there is the buyer and seller they both will paying more than if they went with a legitimate agent from a reputable company.
Lets cross our fingers that the business survives this technical age of do it yourselfers. Glad to be back from the mountains where I could not communicate with technology for a week.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
;)
Links;)
Archives
