Hi Lenn,

We have too much of this one going on here in New Jersey, "TOO MANY AGENTS CHASING TOO MANY HOUSES TO LIST FOR SALE - SCENARIO #2. Agents buying the listing."  It almost seems to be the policy of one large locally based company to send their agents out and tell the home owner 50K to 80K more than anyone else just to get the listing, then 3 weeks later like magic the price drops at least that much.  Realtors are not that dumb, the word it out, very few Realtors in this area will put in a offer on one of their listings in the first 3 weeks.  How is that good for the home seller?

It seems like there are lots of Realtors who are getting out of the business, so when the market finally does get better, it will be lots better for those of us who know what we are doing and have put the work in and stayed in the business.  Hopefully not to much longer now, but the longer it takes the more agents will pack-up and get out.

Jim

Goodness, James, you've commented before I even finished.  I always seem to have to tweak posts before putting them in final.

You are absolutely correct.  I know agents in this area who do the same things. 

Thanks for commenting. 

Lenn, I usually agree with what you have to say, but this really sticks in my craw:

"Fact is, home sellers don't really know any more about real estate sales today than they did before the Internet. "

If this is true, I wonder why you make any public posts on activerain?  Obviously, the home sellers won't benefit from the information.  Right?

I'll speak for myself and let you know that I know MUCH, MUCH more about real estate sales today than I did before reading activerain.  I daresay I now know more than some real estate agents (but not you). 

John 

Lenn - where did you get this fact"

Fact:  The real estate market is the slowest it's been since about about 1990  Many areas are experiencing the slowest market in 25 years.

I ask because every market I've researched shows that sales are down, yes, but not at their lowest since 1990, but rather still one of the top 5 best years (many still one of the top 3 best years) ever. 

Lenn,

I've walked away from two listings recently.  One was FSBO who called me and he insisted that his home was worth 50K more than the last sale.  So I let him go.  He listed with a FSBO company at his higher price.   The second couple were actually refered to me.  They wanted to list 60K higher than the last sale and no matter how much I tried to explain the appraisal process they weren't budging.  Another agent took the listing at the inflated price.  I've been watching both of the listings.  The first guy is now down 25K from his original listing price.  The second folks haven't budged yet.  So the JUST SAY NO phrase works for me!  And PS I just came back from a week at the beach!

John S.  I speak to many, many home buyers and sellers daily.  My opinions are based on the conversations I have with buyers and sellers.  Consumers read the information about real estate markets but continue to buy and sell largely as they did ten years ago. 

I post almost all of my articles PUBLIC unless it deals with individual licensees.  Folks can read and take what they wish. 

I daresay that you may know much more than many agents.  Or not.  I don't believe that an agent can learn their craft until they have sold about 50-100 homes.  How many transactions have the average consumer experienced? 

I've managed over 2000 real estate transactions and I learn something on each one? 

Interesting comment.  Thanks for taking the time.

Christina.  Thanks for commenting. My statement is based on what I see in my market and what I read about other markets.  The N E W S   F L A S H in this post was just published by the NAR this morning.  They are saying inventory is the highest in 15 years.  Is that not a slow market??

For agents and market that are not in the slowest since 1990, that's good news.

Lenn, I love you insight on the market... you are the master.  You didn't mention that housing starts are at the lowest in years too!!!

Bob.  Thanks for reading and commenting.

I didn't mention housing starts because home builders are pros.  They are not emotionally involved with inventory, pricing, etc. as is the average home owner. 

My post is PUBLIC as are almost ALL my posts, but they are written for agents.  I do put a lot in Localism so the public can peek under the covers.

A masterful post on the market, Lenn. Our inventory, however, is 25% less than what it was last summer - I believe THAT was our peak. But no matter, the market volume certainly is down and has been, with some creeping up of prices, perhaps fueled more by more higher end homes selling. I think buyers and sellers do know more these days, but the underlying psychological and emotional aspects of the buy and sell, which results in the behavior is much the same. Having more information and data does not always lead to an improvement in behavior. It's still all about the money for most.

Thanks for sharing your thoughts. Had not seen the NAR newsflash yet.

Jeff

Lenn - ok, I can see where you got that info. 

I do have to say that inventory being the highest does not equal sales being the lowest.  It may indicate there is a lower % being sold, but does not mean the volume sold is the lowest.  Make sense?

Thanks again for a thoughtful post Lenn!  I will turn down overpriced listings...I give them 1-5% over suggested list price and if they won't stay under that I walk...our market in inundated with overpriced listings.  There are 38,000 listings in our MLS.  This is not counting all the trusty FSBO's out there!  Seller's are unrealistic.  Made an offer last week on a house at 10% under the listing price...seller flat out rejected it, no counter, no explanation.  It's priced 10% over the comps...totally unrealistic!  Don't understand why seller's agents take these listings, it's $$$$ out of their pocket when it doesn't sell!

This must be a nationwide thing :)  I just saw a listing yesterday on our mls that was priced 124,000 (yes you read that correctly) over the last one sold. Same complex....oh, did I tell you? This is an old townhouse complex ...this is not a single family home. Listed at 499k and last sold 375k. Now this is the kind of action I really get irked about!

Christina.  Inventory the highest, DOM the longest, prices holding up, interest rates increasing - all together in my are mean a slow market. 

Mary.  If every agent gave an honest valuation, sellers would be a lot less likely to overprice.

Celeste.  I got a call from a gentleman who wants to sell a builder's model that he purchased for $592 two years ago.  Today, the builder is offering the same model with a base price of $389,900.  The owner wants to list for $569,900.  Hopeless. 

I find it very helpful to quote the experts, as described in my blog today, but some people just won't listen. 

Case in point - Several weeks ago, I walked away from a listing when the seller wanted to overprice it.  But thank goodness I had second thoughts because it sold full price and underappraised, we re-negotiated and now it's scheduled for settlement this week at $20,000 more than I felt it would sell or appraise.  So, in spite of all our expertise, sometimes we're wrong.  Even if this had never sold, I got another listing and a buyer from the signage.

Going forward, I'll continue to give people my best advice, supported by sales statistics and the experts, but I will not walk away from an overpriced listing - I'll give it my best shot!

Absolutely correct Lenn, I have had to walk away from 6 in the Spring Market. I'm sure some will call me back. Yep better things to do.

Lenn, First I have to say, I absolutely love this:

WARNING:  HARD CORE REAL ESTATE INFORMATION BLOW.

So true so true:)

My market is certainly suffering big time right now and it's going to get worse. Don't even get me started on overpriced listings. If they were removed from the market, inventory in Poinciana would drop 50% overnight. They are clogging up the market.

What if all REALTORS(R) refused to take over priced listings? Sellers would be forced to get real and the market would improve. Or would it? Or would buyers still bring it down further? Are overpriced listings a necessary evil? I may just have to ponder this.

Thanks for the mention Lenn.

ENTER THE AGENTS, the "experts", the persons with experience.  The agent is the person who is tasked with giving the seller good advice about selling his house.

Lenn - This phrase really struck me! When we accept the task of responsibility for giving good advice - we will not have overpriced listings.....of course, we would lose some agents, too! We absolutely have to present the facts, then walk away if the demands of sellers are not in line with the market. Really Great Post!

Margaret.  I've taken overpriced listings too - and sold them.  Experienced agents can handle it.  Fact is, you were prepared to handle the contract, appraisal matters.  Too many inexperienced agents can't and simply end up with an expired listing and another seller who has less respect for what we do.

Missy.  Easy to get listings these days.  The trick is knowing where and how you want to spend your time.

Bryant. The reason I believe that the overpriced listings is so detrimental to our markets everywhere is because the spread between the rise in prices from 2001 to 2005 was about 100%.  Now, prices have come down a big 10%.  Now, with interest rates on the rise, 1/2% in the last month around here, the market will just get slower and inventory will be higher and agents will just keep buying listings.  JMO, of course.

Paula.  Agreed.  What agents don't always understand is that the time and resources they put into overpriced listings could be spent getting good business.

Great post and great food for thought.  Pricing is the name of the game I agree.  And be honest with folks is the best policy also.    

Lenn,

Very good post.  I am not a realtor but as a loan officer I definitely have felt the slow down.  The top agents I work with seem to be fine, but the rookie agents or smaller volume agents seem to be very slow.

The one thing that puzzles me is that housing demand is still high, right?  From what I have heard from various sources, the housing demand in the U.S. overall should stay very high for years to come, partly because of immigration.  If demand is high, shouldn't that push prices higher? 

Lenn,

I don't think our market here has hit the low yet.  I am seeing evidence of agents reducing commissions and of course our own state association suggested that anyone who is not doing well should just get out of the business so that there is enough business.   Very hard core post. :)

My market is different this year. Last year we were down pricing was very important. Properties that sold were within 2% of listing price.

This year the market has taken off again and prices are aggressive but they are selling within 8% of listing price.

I guess I will be going to the beach soon because I just lost a listing over ($25,000). The fact is in my market it will still sell. The only difference is my price of $650K coupled with my marketing probably would have got the seller multiple bids probably up to $675K within 2 weeks.

The lsiting agent that listed it at $675K will probably get offers at $650K. I'm re-thinking my listing strategy to become more aggressive in our current market, everything seems to be selling.

Yes too many agents. We have 1.4 agents for each property that sells per year.

Blue Ridge - You are right.  Pricing is and always has been the name of the game.  Which is why experienced can tell sellers the hard truth and still get a listing. 

Olan - Thanks for stopping by.  Loan officers are cold calling me every day. 

Teresa - Our market hasn't hit the low yet either.  I remember saying 6 months ago that we had 10-20% downward to go.  We're half way there in some areas.  We have a way to go.  Inventory is still pathetically high. 

Mitchell - New York is hot because it's in a luxury range.  Luxury homes are selling here too.  I got a $M one ratified this morning.  But, the $400 buyers are still looking.  Luxury homes are selling everywhere. 

Good post Lenn.  Sometimes I get a liitle bit slow on the uptake, but I've finally gotten comfortable with telling a seller like it is and walking away from the listing if they don't like what I have to say.

i'm convinced that in the state of florida that upon reaching a legal age or having lived in the state for 6 months you must acquire a real estate license or mortgage brokerage license or both.

Pat.  Thanks for visiting and commenting.  Listing is HARD WORK.  If the price isn't right to start off, it's not going to be any fun.

Anonymous.  I believe the half the 1,300,000 agents are in my area.

Lenn - A featured post! Congratulations! Well deserved!

great Post Lenn... I see this every day, so many Agents taking so many over priced listings.. Its so hard to deal with. Even when we are taking them below what the comps say, they are just sitting.

I listed a Nice Gulf Access Home a few weeks ago... I listed it for $369,000, the next day an Agent came and listed the Vacant Lot next door for $469,000... Yep $ 100,000 higher for Vacant Land...

 Its a Crazy Time for sure.

Lenn,

An Excellent post.  Here in the Hilton Head real estate market, I find that most of the full-time agents are pretty astute with pricing.  The mistakes I see are from the newer part time agents that simply do not know the market.  In my company, Charter I Real Estate and Marketing, our Broker does a great job of training us for the market conditions.  I've worked really hard to get my listings here in Hilton Head priced correctly.

Lenn you are always on top of the game....and this post is no exception.  Very well done and true too!

Lenn,  Good post. There sure are a lot of new agents over the last few years. 

Yup, of course.  In a nutshell, perfectly presented- thanks for the great post- and completely down to earth.

I'll have a bahama mama with that listing!

Lenn!  You are incredible!  I really love to read your blogs!  You are a breath of fresh air because you tell it like it is!  We do the same thing.   It is not doom or gloom to tell the truth, it is enlightening.  We are in a business cycle that is contracting.  No the sky isn't falling, it is leveling and will be going back to a normal market. 

It is easier to lie to a seller to seller that his home is worth exactly what he was thinking of instead of saying can you sit down and let me show you some numbers.  Doctors that are able to tell a patient they have an illness, but that we will form the best possible strategy to beat it are respected. As professionals, we are no different.  It is about service. It is about truth, and it is about performance.  Getting from A to B!

Keep up the great posts!  You are a total inspiration!

"Prices are holding steady"

Not here. Median is still steadily dropping QoQ and YoY as is price/sq-ft (PPSF). SFH median is now down 10-15% from peak, PPSF is down a good 20-25% from peak. If this continues through the summer, I fear that PPSF will come down even more this winter. We're around $120/sq-ft right now.

How much lower can it go?!

And as far as taking overpriced listings, the agents I personally know are refusing to take anything that's not priced to move. They don't have the time to waste on pie-eyed sellers.

Obviously, your mileage and market may vary.  It's a bloodbath here.

Lenn.....  this was an excellent post. Sure, this is your opinion, but as you stated, from many years of selling real estate. Sure, you can read up on this and think you know more... but I loved your answer to John S.....  you hit the nail on the head with your answer. Great job with that and this post.

Before I go.. sure, each market is different. But on a hole, it's been bad....  getting slightly better though.

Lenn: Desperate agents don't go to the beach and overpriced listings get beached.

But, but, but.... I was told that we are all gonna die..... ;-)

thanks for the great info

Good post and good information. And yes there are too many agents chasing too many homes.

I think too many agents learned thier craft in a red hot market. They let the seller pick a price out of thier .... well out of thin air. They don't even know how to price.

Fact is, home sellers don't really know any more about real estate sales today than they did before the Internet.  They just believe that they do because they have "done their research".

Lenn, 

This statement is so true.  I had a great friend and client visit me from Arizona last month.  They were worried because of their home not selling (they own two now).  It had been on the market for three months.

I played this 21 minute podcast of Russell Shaw for them to no avail.  Now Russell knows a little something about selling homes in Phoenix; he sold 400 last year.

Then I took them to Zillow and showed that their home is $50-60,000 overpriced.  They showed me all of the blogs denouncing the Zestimate.

As Russell says in his podcast to Realtors:  If you're going to overprice a listing, spend 4 hours doing something you really love for four hours.  You'll get paid the same amount of money but at least you'll be doing something you love.

Like go to the beach 

Lenn - A featured post! Congratulations! Well deserved!
Paula.  Thanks.  I knew I could hit some nerves with this, but I'm reflecting what I see in my market and
what I read about other markets.

great Post Lenn... I see this every day, so many Agents taking so many over priced listings.. Its so hard to deal with. Even when we are taking them below what the comps say, they are just sitting.
I listed a Nice Gulf Access Home a few weeks ago... I listed it for $369,000, the next day an Agent came and listed the Vacant Lot next door for $469,000... Yep $ 100,000 higher for Vacant Land...
Jay.  They must be selling the gems in the ground. 

Lenn,
An Excellent post.  Here in the Hilton Head real estate market, I find that most of the full-time agents are pretty astute with pricing.  The mistakes I see are from the newer part time agents that simply do not know the market.  In my company, Charter I Real Estate and Marketing, our Broker does a great job of training us for the market conditions.  I've worked really hard to get my listings here in Hilton Head priced correctly.
Diane.  Thanks for commenting.  You are right.  Experienced agents can handle these sellers.  The inexperienced agent is going to take them and they will eat them alive.

Lenn you are always on top of the game....and this post is no exception.  Very well done and true too!
Gary.  Thanks for the kind words.  I love this game. 

Lenn,  Good post. There sure are a lot of new agents over the last few years. 
Tim.  The new agents over the last few years is the subject of a post that needs to be written.  I'll take a shot at it later.

Yup, of course.
Thanks Laurie.  I understand perfectly.

I'll have a bahama mama with that listing!
Chris.  Thanks for stopping by.  The beach looks pretty good about this time of the year.  I prefer the mountains, but anything is
better than being chained to overpriced listings.

Lenn!  You are incredible!  I really love to read your blogs!  You are a breath of fresh air because you tell it like it is!  We do the same thing.   It is not doom or gloom to tell the truth, it is enlightening.  We are in a business cycle that is contracting.  No the sky isn't falling, it is leveling and will be going back to a normal market. 
It is easier to lie to a seller to seller that his home is worth exactly what he was thinking of instead of saying can you sit down and let me show you some numbers.  Doctors that are able to tell a patient they have an illness, but that we will form the best possible strategy to beat it are respected. As professionals, we are no different.  It is about service. It is about truth, and it is about performance. Getting from A to B!
Keep up the great posts!  You are a total inspiration!
Jim.  Thanks for the kind words.  I have found that, when faced with facts and market information, most sellers will price realistically.  I consult on about 2-3 of these a week and when the agent takes the high priced listing, the calls next week are from unhappy agents complaining about the seller.  "Don't complain to me", I tell them.  When you take an overpriced listing you "STAKE YOURSELF OUT FOR ABUSE FROM SELLERS". 

"Prices are holding steady"
Not here. Median is still steadily dropping QoQ and YoY as is price/sq-ft (PPSF). SFH median is now down 10-15% from peak, PPSF is down a good 20-25% from peak. If this continues through the summer, I fear that PPSF will come down even more this winter. We're around $120/sq-ft right now.
How much lower can it go?!
And as far as taking overpriced listings, the agents I personally know are refusing to take anything that's not priced to move. They don't have the time to waste on pie-eyed sellers.
Obviously, your mileage and market may vary.  It's a bloodbath here.
Robert.  Thanks for commenting.  "How much lower can it go?"  I would suspect that would depend on how much higher it went in the years 2001-2005.  If our prices woulddrop a healthy 25%, we'd have some buyers writing contracts rather than looking at what their money will buy and renewing their lease. 

Lenn.....  this was an excellent post. Sure, this is your opinion, but as you stated, from many years of selling real estate. Sure, you can read up on this and think you know more... but I loved your answer to John S.....  you hit the nail on the head with your answer. Great job with that and this post.
Before I go.. sure, each market is different. But on a hole, it's been bad....  getting slightly better though.
Jeff.  Thanks for the comment.  Each market is different, but national stats are not great either. 

Lenn: Desperate agents don't go to the beach and overpriced listings get beached.
Roberta.  Thanks for dropping by.  Our overpriced listings just sit and sit and sit.

But, but, but.... I was told that we are all gonna die..... ;-)
thanks for the great info
Thanks Tom.  We're not all gonna die, but with so many agents scrambling over listings, we're all taking a bath until buyers will buy what they see.  They are not buying around here today.

Good post and good information. And yes there are too many agents chasing too many homes.
Bob and Carolin.  Thanks for commenting.  I believe that the glut of inexperienced agents is one of the big problems.  It is in our market.

I think too many agents learned thier craft in a red hot market. They let the seller pick a price out of thier .... well out of thin air. They don't even know how to price.
Doug.  I believe you hit something there.  Many agent DID learn the business between 2001-2005 when anything listed sold.  Not today. 

Fact is, home sellers don't really know any more about real estate sales today than they did before the Internet.  They just believe that they do because they have "done their research".
Lenn,
This statement is so true.  I had a great friend and client visit me from Arizona last month.  They were worried because of their home not selling (they own two now).  It had been on the market for three months.
I played this 21 minute podcast of Russell Shaw for them to no avail.  Now Russell knows a little something about selling homes in Phoenix; he sold 400 last year.
Then I took them to Zillow and showed that their home is $50-60,000 overpriced.  They showed me all of the blogs denouncing the Zestimate.
As Russell says in his podcast to Realtors:  If you're going to overprice a listing, spend 4 hours doing something you really love for four hours.  You'll get paid the same amount of money but at least you'll be doing something you love.
Like go to the beach
Brian.  Thanks for the comments.  I have said a hundred times and I'll say once more today, "An overpriced listing will eat you alive".

Lenn. just terrific.. the market has changed everywhere and sellers who have to sell need to realize it and soon as it just costs them more money for everyday a home sits and isn't sold.. Sellers who don't have to sell should just take their homes off the market.. unless they are lonely and  have decided this is a way to meet new people..

I'm with you I'd rather be at the beach..or blogging

Great post, It is a true too many agents, not enough listings, there will always be someone willing to take an overpriced listing.

Well written post, Lenn, and so true...so many agents BUY listings because they tell sellers what they want to hear instead of what the truth is......

So sad...the sellers get shafted over a 6 month to year period of time...and could have sold their home sooner....AND for more money!!

Great post, the only thing that concerns me and was not mentioned is that I feel that a big reason for the current correction is that the overall market was bid up by speculators that were lured by rapidly appreciating prices. Those speculators intended to sell quickly at a high profit, not keep the property. Now, many of them can't make the mortgage payments & are looking at a looming foreclosure. In some areas it will take time for the market to normalize.

Jackie