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Picking your inventory

Real estate market conditions across the country are declining. This means we have an imbalance between the Cherries in a bowl homes for sale and the number of buyers looking to buy. When the supply is up and the demand is low, Realtors and home owners alike get pinched.

Homeowners want to sell, but they can't so they end up expecting miracles from the Realtors. To compound the issue, us Realtors end up having a ton of properties to service, but no cash flow to service them.

What do you do?

Me? Well I've had enough brain damage in my life from trying to make people happy when happiness (for them) is not a reality. These days I "cherry pick" my listings. If the homeowner is not willing to price it right and package it for the market, I move on.

Sometimes the problem doesn't lie with the home, it's the homeowner. Homeowners who fail to recognize this is my business and they need to listen to me, but won't don't end up in my cherry basket.

Hard nose or wise?

No, my tough attitude with an unrealistic seller is best described as "tough love." If I cave in and take an overpriced turkey, that will not sell in a month of Sundays, who am I doing a disfavor? Me? Yes! The seller? Even moreso! We are hired to bring the benefit of experience and wisdom to the table. If as a broker I let someone who does not have the experience tell me my job, he doesn't need me. What he needs is more practice!

NAR Forecast Turning down business

Wisdom and experience comes from being in the trenches through all sorts of financial ups and downs. Our real estate market has been very sweet for those that got into it in the past 5 or 6 years. Agents who began their careers in recent times have no battle scars from bad markets. Battle scars are ugly to some, but like wrinkles they are well earned.

Battle scars give seasoned agents the power to go on. We know there is a better market ahead. We also know we ARE the leaders, the ones who will stand firm and give others something firm to hang onto.

Newer agents there is hope ahead. The hope lies within you to turn down business that will not work. Turn it down flat and keep looking for the seller who recognizes your powerful leadership and is willing to listen and follow your advice.

Let the wimps take the listings!

Most folks have heard this saying, it's one of my favorites for listing homes in slow markets. Here goes,

When it comes to life the best position is:

First lover
Second spouse
Third listing agent

Jockey for 3rd position and chances are your seller will be educated and ready to listen!

Your strength, knowledge and conviction is needed...

Agents do the math, learn forecasting and sharpen your presentation skills. It is up to YOU to turn this market around. You and the many other agents who are called upon to list and sell a property must assume the responsibility to know your market and tell it like it is.

If the seller gets mad at you so what! It's better to have him mad at you now, than 6 months from now! So do your homework, take a deep breath and tell it like it is!

Help yourself to the cherries...

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Posted by Kristal Kraft ~Denver Real Estate~303-589-2022 on 06/05/2007 01:24 AM

Comments (85)

selling a home, sellers, sell home, listing

Originally posted at: Denver Real Estate & Relocation: Picking your inventory

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85 Comments on Picking your inventory

JUN

2007

Kristal - so well said I would rather have 2 listings a month priced to sell than 20 that get no showings - I had not thought of researching for the thrid though - it would also make you look great to the community as you sell it when the others couldn't

Thesa ~ yes being the 3rd one in is sometimes a charm. Of course that totally depends on your market and your personal influence with the seller. Some sellers are very much "with it" and know what they are up against. I've actually seen it go either way. Thanks for commenting.

KK,

Very well said and I couldn't agree more. No more overpriced listings for me. I have no problem telling a client I don't think I can meet their needs.

Fran

Good post.

Carolin Benjamin
Bob and Carolin Benjamin - The Benjamin Team
Keller Williams Integrity First Realty
Gold Canyon Arizona

Good Post Kristal:

I never have believed in taking over priced listings. Although, I must admit I will occasionally take one at the top of the market if it's a great place to have my sign...BUT even then: I warn the Seller that we will have to test the waters at that list price and be prepared to steadily lower the price to match the market before the listing becomes stale!

Kristal - You're dead on with this post. I agree that we really need to cherry pick and take only the listings that will actually sell. Who wants to have a sign in front of a house for six months to a year professing our inability to get the job done?

Kristals, In our town a couple of agents were able to convince their sellers to price their homes at a reasonable price, and believe it or not we were on of the 6 other buyers who put an offer on these homes. List it right and it's sold.

No thank you to the cherries. I had so much today I think I am going to pay for it latter tonight.

Now that is REALISTIC! Turn the market around...and I'll pick the ripe cherries!

I loved the line, "Me? Well I've had enough brain damage in my life from trying to make people happy when happiness (for them) is not a reality." So true, so true! Plus my other favorite, "If the seller gets mad at you so what! It's better to have him mad at you now, than 6 months from now!"

As Realtors, we try to please people everyday that can't be pleased. My friend in the office just said, "If I ever leave Real Estate, I'm not being nice to people that are raving about idiotic things when I know what I'm talking about and I'm only trying to help them!"

Guess it is cherry picking time in Colorado. Great picture!

I am not in the business of financing fantasies.

I have turned down close to 20 listings this year already.

Right on post!

BOY Picking inventory for you and picking inventory for ME means 2 totally differnent things.

And yes... I DO miss the "good ol days" (MOST at least). How this place has evloved.

You are on of the "ones" that I ACTIVELY hold a special place in my heart.

Post Script: I did not even realize it, but as I was posting this one and only comment in the middle of the night, it puts me over 100k point. God does work in weird ways... Me.

Fantastic post and how very true! Thanks!

I just wrote a similar post- but yours was better constructed! Great Job!

Kristal this topic got me out of bed again at 4am and I can't believe you have a post on it! I think I agree with Craig.

Here is what got me thinking. One neighborhood with no real sales and not a lot of buyer showings for anyone's listings, mine included. So I was in bed thinking of how to generate interest. It hit me that it is time to go back to the Development Corporation and the Councilman and get some 'dog and pony' activity going. There will be all new elementary schools within 12 months. That means every one. There are new transit stations going in, new parks. There are industrial parkways for jobs. And affordable housing. We need to dog and pony to other communities, community leaders and brokers to get them involved in the knowledge needed to promote it. At least that is going to be my proactive stance. In the meantime, yes, unless someone needs to move, I am encouraging them to not put their home on the market!

you're right. In this market, you need to interview the seller, as much as they need to interview you. I took a listing last month, that I'm regretting. It was a favor to a friend, and a referral. But, I'm having a difficult time with the seller because his home isn't priced accordingly.

I did this last Saturday. I was out picking cherries and a homeowner kept trying to stuff their overpriced, rotten apple in my basket.

Bounce.

Kristal, I also cherry pick my listings and have turned down numerous ones over the years. I like being the 2nd one in, never thought about the 3rd one......nice illustrations.

that is awesome post. I need to start picking ripe cherries not the overripe ones that know one wants...

KK- This is so Important. How do you balance the supply and demand side of Real Estate? Simple reduce the supply. If 6 Realtors ALL tell the same unrealistic client the same thing, the seller will eventually figure out he has to wait to recover his investment, or reduce his asking price. With so many agents out there, the chances are someone WILL tell him what he wants to hear. The old adage may be changing here folks.. to "if you list too high you won't last". Better to have no listing at ridiculous prices, than to possibly harm your reputation in taking ones that are impossible to sell. Laurie's comment is Perfect. "Don't finance fantasies" it is like working yourself out of business! Pick wisely or you could have sour grapes!

A most excellent post. Here is something I'm trying to figure out though - when I turn down a listing, I wish the seller good luck. I even send a nice thank you card. But they seldom call me back to list the house when it expires. It seems they hate to admit they were wrong and I was right. It does happen occasionally that I will get the listing the second time around but not often enough.

Kristal,

Great post--We all have those overpriced listings and unrealistic sellers. I have one now who recently suggested I reduce my commission by 2% so they could reduce their price. Nice logic!

Great picture of cherries. So far this year, I haven't seen quality cherries like that yet. I can't wait.

You are so right. A cooperative seller is the key to a good sale. If they don't want to listen and cooperate, what's the point?

Good insight.

Our market needs an additional 10-15% reduction in price in addition to the 5% that we've already had in the past year to get buyers out.

I'd hate to be a listing agent these days.

Being a buyer's agent isn't a bowl of cherries either. Most of the calls I get are folks looking for a decent place to live in their qualifying price range. Unfortunately, much of what many home buyers can qualify to buy is pure junk.

I don't blame them for not buying.

Kristal,

Very good post and so true! I love how you refer to it as "tough love" , thanks :)

This is worth repeating and / or keeping on the fridge :

When it comes to life the best position is:

First lover
Second spouse
Third listing agent

LOLOL

Hello Kristal

I look at a listing as an investment and like many investments it is a liability on the books until it is sold. By a liability I mean in accounting terms you spend money & time on it in hopes of a profit in the future.

I think it is a Realtors responsibility to tell the seller the truth about the market wether they want to hear it or not.

Kristal: How did you know it's cherry picking time in Washington? A very good analogy. Even in a hot market like we have, I am getting more pleas from agents: "motivated sellers" , "Price reduced", "don't forget about this wonderful home", blah, blah, blah. Sellers getting greedy in a hot market and agents afraid to stand their ground... until that third agent comes along and figures it out!

You are absolutely correct. I like the theory on 3rd place agent. Gives you a definite time period for things to sink into the seller. I always said it's best to be second lister around here, because the first agent has been begging the seller to come down in price and you come in with a presentation that supports the previous agent's attempts. (of course only after the seller contacts you first!)

ps. Craig congrats on 100,000...go write a post about it. %-)

Those cherries are making me hungry... Great post and summary

Right now I think that the people who used to thrive on listings are hurting because there just aren't a lot of sellers who want to accept the market conditions are not in their favor...

buyers agents seem to be busy ... but they're all scooping up the right-priced units while listing agents get more and more egg on their faces

then we keep getting blasted by the ignorant press and their "Save your 6%" articles... no wonder there's cherry picking!! we're all cherry picking CLIENTS, not listing... we're picking the ones we want to work with and letting the finicky ones keep stinking up the inventory ratios

Thanks for your article. We're seeing the same conditions here in South Lake Tahoe. We're telling the truth, making it public and doing everything we can to help turn the market around. Mostly that has to do with making real estate information public. Goal is to provide resource to help Sellers adjust, then accept new market reality.

We're doing this 24/7 on our Lake Tahoe Real Estate Blog. Check it out: www.laketahoerealestateblog.com. All current market statistics are found in our left side bar.

Thanks Again for your post.

Kristal, so well said... I am very careful with the listings that I take on... I put a lot of money and energy into each one of the properties I market in Pasadena. I have learned a long time ago that it is better to walk away then deal with an unrealistic seller.

Great post!

Kristal,

First, congratulations Craig! Where is your blog? There should be a 100th group:) And I agree with you.

Second, I love the way you created this post!

Third, As a newer agent, people do not tend to listen to us for our "powerful leadership":) The only thing we really have is correct pricing and sticking to it, the same as a seasoned agent.

I see all levels of agents out there with signs today though, not sure what they were thinking when they took those listings:( I suspect that the roller coaster ride of the previous years still had them pricing high.)

I get upset if my listing is not sold within 30 days! I am "always" rechecking the comps. As Marlene said, "Who wants to have a sign in front of a house for six months to a year professing our inability to get the job done? "

Very, very well said.

I have never heard another agent call a house an overpriced turkey. When I started doing open houses for other agents, I would always check to see that they weren't OPT's.

The greater Seattle/Tacoma market is still pretty warm. Our problem is we have greedy sellers who think they should realize $100,000+ in less than two years. I will take a listing that is a little high as long as the seller and I have an agreement that we will reduce the price - sooner rather than later. But a little high means no more than about $15,000.

Kristal,

I'm sure everyone will agree that most sellers are not going to listen because they think it is still 2004-05.

If not one more home was to come on the market the inventory would still probably take 2 yrs to sell or houses are going to be taken off the market as well as higher foreclosures then we have ever seen.

Very nice words of wisdom. Some clients can just turn into a waist of time and energy. A Realtor has got to know when to say goodbye to a client who potentially could be dead weight and in this market none of us can afford that.

Fantastic post - as always! I try to only pick the cherries, but even then, in this market it's tough! The average DOM for our MLS is upwards of 120 days. I sigh when I hear a potential seller say, "well, the Jones' sold their house for $XXX a couple years ago ... "

AMEN! Very well said and very true! I use to think to have some kind of listing was better than nothing. Maybe in the very beginning it was . . . I'm learning though that to take a listing just for the sake of saying I have one is counter-productive! It wears me down . . . Thanks for the pep-talk and shared insight. I always appreciate your posts.

It is funny to see this post right after I had a talk with my mentor in the office. I was complaining that there are so many unpleasant clients dragging me into all different directions and I lost my focus of why I wanted to become a realtor at the first place. She flat out told me, "fire those you don't like!" I guess a lot of us are scared of losing customers or tuning down business. But I think KK and my mentor does have a great point here. At the end of the day, we want to do a good job for both us and the seller. Taking on a high price turkey and wresting with unreasonable sellers will only make both parties miserable for months. Life is too short for that!

Turning down listings is inconceivable- until the first overpriced property listed consumes time, energy, finances, patience, goodwill and finally, an uncomfortable parting of the ways (with lighter pockets).

I've been telling my newer agents this since the market has changed. The good thing about this market is you have more listings available. The bad thing is you will have a tougher time selling them. They need to really keep up on the local market and bring their expertise to every seller. Good post!

Great post, if only all agents were there the market would be better served, but there are always those who will take those overpriced listings.

KK: The content of your post is great, but the look of the whole thing is just fabulous.

Could you, (or anyone) please exlplain to me how to place pictures in different areas in a blog? Mine are boringly at the top. Thanks!

Walking away from listings was the hardest thing I had to learn. I'm competitive and I want my name out there, too. And I still get that feeling. But I've learned that I'd rather let 10 go and find out 1 sold than to take on all 10 and have the headaches of a lifetime.

I've been in good markets and not so good markets. If you smarten up (is that a word) and keep working you'll be okay.

Kristal, what a luscious bowl of cherries! And it's because you rejected all the bad cherries.

We turn down more properties and more sellers than we list. We're not only doing a disservice to the owners of that property and to ourselves, but to all of our other clients if we take on unreasonable properties or people.

Great post. I was just having lunch with a friend of mine, retired realtor, and we were discussing this same thing. There are way too many agents with overpriced listings. Some have 50-100 active listings but NONE are pending, there MIGHT be a problem there. It's tough telling sellers what they don't want to believe but it's definitely easier than agreeing with their incorrect price THEN going back to adjust it. Wasting time, energy & money for everyone.

Great post Kristal,

This is a very interesting time, in our profession. Thanks for your right on thoughts, on this topic.

KK, Thanks for the encouragement to 'just say no'! :)

I completely agree. Why waste time and advertising dollars on a home that is not going to sell? Plus, you'd have to deal with sellers that are now aggravated that their home isn't selling but still won't listen to your advice. Poor shocked sellers when you turn down their listing, I bet. ;-)

aSAuch a valid point, I too just blogged on a similar thought. We cannot let the media give us the black eye without a fight. It boils down to educating the buyers and sellers- speaking in truths and knowing our local market inside and out. We need to be proactive in the voice of Real Estate.

Kristal,

Straight talk is what's often needed. Sellers today find it very difficult to adjust to market reality, even when they are so advised by agents. We also encounter prospects that have unrealistic expectations and if proper counseling doesn't bring them around, we professionally turn them down. No need to waste time on something that doesn't work.

I agree with not taking listings that are overpriced and that the sellers are unrealistic as to price, terms, and outcome. Sometimes we need to walk. But hey, maybe we can refer them to someone else.

Kristal, it is hard to say no to business, but you are right what good is it to take a listing that you can not sell and only end up with money spent and an unhappy Seller. It is hard to say no, but sometimes no is the best answer for everyone involved.

Kristal,

Excellent post. I believe in quality over quantity and I love cherries.

Our market right now is experiencing something different than other markets. Today I saw figures from the MLS 2007 vs 2006. Last year we were clearly in a cool market. We had 3 years of inventory. Sale to listing price was 97.5% and DOM was 22 weeks.

This year the market is hot again and even after Memorial Day which is usually dead it hasn't slowed down. Sale to listing price is 92% and days on market is 20 weeks. The inventory has mostly been absorbed and it is mainly new construction. Resale listings are down.

We are very tied into the financial markets. Anything can happen. I don't know if we are ahead of the rest of the country or behind. Our market is referred to as "FIRE" finance, insurance, real estate. I hope we are ahead of the curve and the rest of the country picks up.

Good post, it pays to pick your listings. You need to work on deals that will produce $ in the shortest amount of time. If the person isn't motivated the timeline will drag out.

I agree listings that does't sell will cost you money and bring more stress to you ,great posts.

Kristal,

That is a great post! My wife and I (are partners) have this discussion daily as we consider whether or not to take a listing. You said it well.

Jack

Kristal: good reminder. Just today I was in a CRS class with Pat Zaby....used the first lover, second wife and third Realtor. Very good way to say what we feel!

Kristal: you hit the nail on the head! Great post! In our area, it's the same. Sellers are unrealistic. I met with a top producing agent in Benicia today, they said there is a 2-year inventory in my area. Over 1200 listings in Vallejo, CA. Only one nosey neighbor showed up at the open house last weekend inspite of 6 signs, news ads, email blasts, website marketing, and mailouts. Cherry Picking and Target Marketing are the only way to survive this market. On the other note, (much more optimistic) like the greatest pyramids of time, this too shall pass!! I'd just like to know when.

We are fortunate to do what we do for a living...life is a bowl of cherries, thank God it's not the pitts!

Kristal: As a newer agent, this is great advice. I have to say what others are not willing are able to say, in order to be where I want to be when this passes, On Top! Excellent post! Thank you~

We're with you. No sense taking a listing that is overpriced and will just suck up your time and $$.

Thanks for sharing your thoughts with us AR's.

Please visit our website WWW.REINNH.COM

Browse and comment.

We're with you. No sense taking a listing that is overpriced and will just suck up your time and $$.

Thanks for sharing your thoughts with us AR's.

Please visit our website WWW.REINNH.COM

Browse and comment.

Kristal, you are so right! I most definitely cherry pick my clients. I ALWAYS have a phone interview to see if we are a good fit. If I sense right away they have the personality to override my suggestions (aka "know it all"), become argumenative, believe their home will sell $20K over recent comps with nothing to support it or have their own ideas of how their home should be sold (ie. me being at every showing, open houses every weekend!), I cut my losses!

Chances are in 6 months they will reconsider and let me work my magic! :-)

I couldn't agree more. I have talked with a few unrealistic sellers.

kk- The image is terrific and so is the advice.. and it's always the over priced sellers who also want the most expensive ads, open house every weekend and feedback everyday about why their home isn't being shown and what are you going to do about it..Life's too short..

Go KK!!! Another awesome post from an awesome agent! I've had lots of luck with being the second agent as well!

A few months ago I was disappointed when I did not get a listing. It went on the market about 30K higher than I recommended. Then I got the call 3 weeks ago that the listing was expiring and they wanted us. We got it sold in a few weeks. I was much happier to be second.

KK, I have to give you mad props for this post. As many times as I, and many others, have posted about overpriced listings, we should all know it by now, but there's never a shortage of agents that need to learn about this.

QUOTE OF THE DAY:

When it comes to life the best position is:

First lover
Second spouse
Third listing agent

Personally, I don't yet have the battle scars you mention, but I learned early on to stay away from the unrealistic sellers and to stand my ground on what I know. Words to live by. Thanks for another keeper KK!

JUN

2007

Well said!!! I too, would rather have a couple of listings that are priced to sell than those no one will see.

I do the same. Listings can be a huge expense. if the sellers set the price too high or are just plain unreasonable I lose money.

JUN

2007

Excellent Post! Great advice for old and new agents! Love your quotes and the comments to this blog ;)

I just read this post again. It still makes alot of sense.

JUN

2007

Great post Kristal! You've made the Week in Review!

We, too, turn down more listings than we take. To take a listing, it needs to be within a reasonable distance of our office, be pried right and have sellers who appreciate our expertise.

JUN

2007

KK - I've been the first love, the second wife (happily of 21 years) - now I'm looking for the 3rd listing agent clients - You have given me the formula for success once again - :-) Loved it - been busy with "clients" - (3 AR Buyers in town - yeah) Just wanted to come say Hi and let you know I wasn't neglecting you!! Congrats on a well deserved feaure.

JUN

2007

Agreed. About 10% of the inventory is selling every month in this area. Fortunately, about 40% of our inventory is selling every month!

JUN

2007

Cherry Picking You Listings...I like the sound of that! It's also contingent on doing the hard work of prospecting on a regular basis so you don't feel desperate with the prospect of "slim pickins'. Great post & graphics Kristal.

JUN

2007

You are amazing. Your posts are a model of what the best can bring forth. I love what you do and how you do it, say it and show it. I am making a study out of your posts. Right now, I think you are the most that most captures my imagination. Thank you for providing such a superb model for me to emulate.

Sincerely,
William

JUN

2007

Kristal, Nice Info and advise. Now I should probably apply this to my business... Cherry Pick. I like the idea and the logic. Thanks

I'm so impressed..over $200k in points..

You're the bomb..keep up the good work

JUN

2007

Looks like you might have your answer from above. Most important you must stay in contact with them and let them know what the market is up to so they know what to expect all the way. Lowering the home might or might not sell it. Times are tuff and days on market are longer that normal. Builders are giving away incentives that home owners cannot necessarily afford.

JUL

2007

Kristal,

Your "velvet hammer" approach to reality is refreshing... Wish we could clone you down here in AZ...

OCT

2007

I couldn't agree more, I wish I read this before taking a listing over the summer where the sellers (former FSBO's) would not let go of the control and let me do my job as their Realtor!! I am a newer agent and it is so tempting to take any listing, but I'm learning it is NOT worth my time or money spent on advertising in the long run. Thank you so much for this invaluable information.

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