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Why Have an Asking Price if you Negate it in Your Property Description?

I was looking up properties in the MLS today, and I came across a very interesting one. It has been on the market just a month, but has had several price adjustments.

The current asking price is $365k and it says in the description, "We will not accept an offer under $350k check the comps and compare the difference."

Why have an asking price if you're going to negate it? The seller is asking $365k, but they're really saying that they're asking $350k.

Why not just list it at $350k and be firm and show the buyer why you're firm? Wouldn't you get more showings at $350k?

But again, why even say something like that in your description? List it at your asking price, and then worry about your bottom line in a counter offer back to the buyer.

Why show your cards up front? NOT SMART!

**Are You Packed Yet?**

Donna Harris, REALTOR®
RE/MAX Austin Skyline
www.DonnaHomes.com
Donna@DonnaHomes.com

Austin, TX and the surrounding areas of Lakeway, Bee Cave, Westlake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Whether you're buying or selling, I'll be with you through the entire process.

Posted by Donna Harris, REALTOR® & ASP - Hill Country Austin Lakeway Homes on 06/19/2009 12:58 PM

Comments (47)

Listing Price in the Sales Strategies / Tactics Channel

negotiating, seller negotiations, buyers, mls

Originally posted at: Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Why Have an Asking Price if you Negate it in Your Property Description?

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47 Comments on Why Have an Asking Price if you Negate it in Your Property Description?

JUN

HA! You are absolutely right. If I were the buyer, I would suggest throwing out $350 to begin with. You should not show your hand before all the cards are dealt. I cant believe they put that in there.

Ok...but if they didn't have that in the description...you wouldn't have laughed...OMG! Do you think that agent even knows what they did???

Well, these folks will never get $365K. Your are right, they should stand firm and list it at $350K.

How crazy is that? Where is the loyality to the seller? How do you negotiate in good faith?

Interesting..maybe they were trying to head low ball offers off at the pass.

I agree, and I personally wouldn't want to give that information out. I am trying to figure out why it would be a good thing - but I got nothing. ~Rita

JOhn, BUt then you wouldn't know I had a full house, A's high!

Shannon, And I did need a good laugh today!

Heather, Exactly!

Paul, You don't?

Konnie, But that's not going to stop them. Most buyers, when they see a seller already low, they think the seller will go even lower. It doesn't hurt to ask.

Rita, Me neither...

Dumb agent but you never know what some agents are thinking.

Donna - If you want to show me your hand after we start playing and say 'Hey, Im not taking below $350' then fine. But to tell someone where you will go before we even started to negotiate is a little crazy.

Its like saying... I have a good hand but I will not go all in. So, if you go all in, I wont cover it and will fold. Why not wait and see what the bet is and then decide (I just want to see how many card analogies I can work in here).

"Stupid Agent Tricks" and this is one of the toppers.

I wouldn't recommend making an offer even as high as $350K if they are advertising it like that! If it were on eBay and the opening bid was $350K, that's different... but listing at $365K and putting that comment in? What were they thinking (and why didn't the seller see it)?

Stunning.

Perhaps the agent is brand new and the seller told him/her to do this. Some people are all about th negotiation process and want to say that they did not pay full price! If you have done this long enough, you know it is best to cut to the chase and just list the property at the price that is closest to value in order to get it sold - no games, no statements like the one commented on.

As strange as this tactic seems... I've experienced it listing REO's. I have an asset company who is acting on behalf of seller. Because many times the asset company can only accept an offer that falls within a % variance of list price... I often get the asset manager telling me I can go as low as, get me an offer! While they don't want to change the list price, they want to exercise the option to accept a price lower than list that falls into the percentage they are allowed. I do not know if this was an REO you were referring to, but this is when I have seen this tactic used to get an offer in.

Isn't it against ethics to disclose the lowest the seller will take and the highest a buyer will pay? And is that information that is allowed to be publicly disclosed?

I'm wondering if the owner knows that is in there as well. Totally agree with you, they shouldn't show all their cards up front! NOt smart.

Too bad there isn't a requirement to share the actual MLS listing content (including confidential remarks) with the seller. That would make a few people think twice about what they write!

Tee-hee - that's silly - no one would do that!! Actually, I do believe you, but if I saw that I'd advise my clients to offer $335,000!

I hope the seller okayed the comment, if not the agent probably is in some serious trouble. (Only explaination I can think of is that the seller really wants to get out of the house, or maybe there's a divorce going on for the sellers. I guess they could have their reasons.)

Also, why wouldn't you start with an offer much lower just to see what happens if you were representing a potential buyer.

I just hope that maybe it's a typo that will be corrected, otherwise I would be incredibly embarassed to be the listing agent.

We have agents and even companies here in west Michigan using an absurd plan called value range pricing. The might list a home at 179,900 and then state that the seller will entertain offers between 150,000 and 179,900. Dumbest thing I have ever seen. The vast majority of buyers are shopping on the web and when they plug in their price range, even if it is up to 175,000, they will never even see this one.

To me it is as bad as the price ranges. If give a choice of the low end or high end, which one is the buyer going to pick?

Sort of a commercial technique for selling product....

For example: This face cream is worth $150.00....order now and we will sell it to you for $25.99.

I guess this agent was attempting to establish that the listing/property is worth $365K according to the comps and that the lucky buyer can get it for $350K (under the comp/market value)

I also postulate that this agent is attempting to appeal to the usual mentality of most buyers....this is to get a property for under market value in the buyer's effort for the satisfy oneself with the "great deal."

Also I think at the same time that this list agent was attempting to keep low ball offers (Under $350K) at a minimum in the effort not to waste anybody's time.

Donna,

I just can not see any way that these MLS remarks can help the Seller. It really encourages low offers.

Yeah, Doona, it is strange the new negotiating strategy that many agents now use...show all of your cards upfront. :-) But seriously, it amazes me that after they do this I can't figure out where they can go from there? I would advise my buyer to offer $350K. The only thing that the seller can say is what? No to a price that they already said they'd accept?

I'm waiting to give a little more of the story after I see if a particular person comments...

Russ, Or not thinking...

JOhn, I like going all in, it freaks people out!

Candice, probably not a trick, which makes it sadder.

Shoshana, The seller has seen it...

Dawn M, In one word, yes!

Kathleen, New enough...

Dawn P, That's completely different, and the listing agents don't usually market that number the asset companies are saying, they just know the number.

Amy, With permission it's ok...

Kristin, THis seller knows...

Karen, In Texas, there IS a requirement. The seller has to ok everything... well, they have the right to ok everything, but usually don't. It's right there written in our listing agreements.

Joetta, Exactly! Go lower and see what happens.

Joseph, Sorry to say, but wrong on all accounts...

Ron, Yes, many markets do price ranging. We're not one of those. I think it's "silly" to say the least.

Barbara, I understand the theory of price ranges as it's basically, "I'll offer this low price and I don't want anything from your seller, or I'll offer this higher price and I want the seller to do this, that, and the other."

Julia, BUt in the end, it's going to draw low balls because she's daring someone to.

Gary, Yep!

Terry, Exactly!

I don't really understand why we have variable pricing as an option in MLS.

Angelia, NTREIS has range pricing and variable fee, not variable pricing. I want to assume you know the difference, but just in case others reading this wonder what a variable fee is, it's when the commission has a variable and the seller pays a different amount if his listing agent brings a buyer verse if another agent brings a buyer. It has to be disclosed in the MLS, upfront, that there is a variable in play, especially for multiple offer situations.

That's an odd comment for the listing agent to make. Maybe they meant that the seller would not look at any offers under 350. Above that amount the other terms could still be attractive enough in order for the seller to accept less than 365.

JUN

OK, granted, it's not the best thing to say in a listing post on MLS, but... Let's not be so hasty to judge the agent...

It is possible that the seller instructed this agent to post that information because they want the dreaded "wiggle room".

There are still actually markets where there may be multiple offers for a property that is very well priced. And, we still see offers from buyers when they know there are multiple offers that are low. They just don't get the difference between price and value... is it possible that the seller doesn't want to deal with that kind of paperwork?

Maybe there was a request from the listing agent for a price reduction and the seller wouldn't agree to the price reduction (not smart on the seller's part...), but the seller would approve this kind of wording (not smart, but hey...)

Maybe the seller doesn't even want to deal with low-ball offers...

I think every single one of us has tried to reason with a seller that just wouldn't listen...

If the seller does't know and hasn't approved this comment is in MLS then the agent has a bigger problem than looking bad...undermining a seller's price position without written authorization is a BIG problem.

Maybe it would be better to understand why it's like that before passing judgement.

Hi Donna,

This sounds like a seller who doesn't want to hear the truth and an agent who doen't have the guts to tell it like it is.

Silly.

For those receiving updates with comments, here's more of the story... The listing agent IS the seller. The seller/agent is facing foreclosure in 2 weeks. Yes, 2 weeks! If I was facing foreclosure in 2 weeks, I would price my house at rock bottom prices to get it sold. Instead, she's got the house priced at one thing, yet stating a different price in her comments so she doesn't have to deal with low-balls. If you're facing foreclosure, you should welcome ANY offer that comes in!!

John, Potentially.

Dava, I know why it's like that, and it still makes no sense. Not passing judgement, just pointing out the facts.

Susan, And they're one in the same person!

Virginia, Yep!

Donna,

I see things like this and often wonder if the agent has written permission to make such a statement. In the listing agreement we state we will never say the seller will take less then the list price unless authorized in writing.

The agent being the seller it is even dumber!

Hi Donna,

It is the obligation of the sellers agent try to get the highest price and best terms for their seller. This was a good post.

Jerry Gray CRB,CRS,GRI / Prudential Carolinas Realty / Winston Salem, NC

I'm wondering if it isn't the Seller telling the agent to put that in there. I have a Seller who wants me to tell them to just make an offer, but won't reduce again no matter what facts I give them to prove that the market price is a lot lower. It's 7 months later. I've tried everything including a new CMA, 74 showing comments of price too high, work needed to be done, etc. It's an estate. Sometimes it's not the agent, and the agent has to let go of that Seller.

The one I was used to seeing was "submit any offer" "make offer" or variations. Just price it right and the offers will come in.

Richard, I usually ask the seller to send me an email for the record if they want me to say something I don't want to say.

Barbara, I know!!!

Jerry, You are correct.

Catherine, If you read comment #32, I explained more of the situation. BUt, yes, your scenario does happen quite often where it's not the agent's fault.

Gene, Yeah, I see those too. Or just the word "motivated". If you're not motivated, your house shouldn't be listed, so ever seller should be motivated.

Good point. Depending your listing to sales ratio for the area you could actually do better than the 350! I know in my area we've had a awful lot of buyers agents arguing for prices that just don't make sense. Maybe she's run into 4-5 in a row!

If the seller is the listing agent and is facing foreclosure, it could be that $350,000 is the lowest price she can take before it becomes a short sale. Although why not go the shortsale route rather than foreclosure. If there is only a couple of weeks before foreclosure, I would think that the seller would price it as low as possible to try to get some kind of offer quickly.

JUN

Donna,

The same holds true with "bring all offers" and the offers that say " Incease Buyer's offer $500 up to $$$$(maximum price)" in the case of multiple offers. The Seller is immediately alerted to what THAT Buyer will pay and ,no, the Seller DOES NOT have to show what the other offers are/were!

Kathy Opatka

Lyn, Possibly.

Pam, Actually, it can't be a short sale because she has too much equity. Instead of selling at a lower price, she's risking losing her equity by letting in foreclose in 2 weeks. NOT smart!

Kathy, In my area, for the increased amount, the listing agent must show the competing offer to make sure it's legit. If there really is no competing offer, the seller could try to counter it back at the buyers' high end, but it doesn't mean the buyer will accept that.

JUN

TAR form 1412 "sellers authorization to release and advertise certain information" is a great form to have sellers complete.

Richard, I used to use that form a lot, but now just have sellers put things into an email for me. It works and it's faster.

JUN

Denial is more than just a river. Unfortunately, even some agents can't see that train coming down the tracks till it's too late.

I see foreclosures almost everyday in our MLS where the seller had equity, sometimes substantial equity, but they were so focused on what they thought their house was worth that they held onto a bad price right up to the foreclosure and got nothing instead of pricing the home to sell and walking away with something.

Hard to feel sorry for folks that can't quite deal with reality.

Guy, I know, and I don't get it. Walking away with $5k is better than nothing plus a foreclosure on the record. Heck, walking away with $0 is better than a foreclosure on the record.

JUN

Whoa. I have to agree with Guy. This seller/agent is in big time denial. No wonder she's in foreclosre...

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