Market Pricing - Now there is a novel idea!

This morning I read the following post and I agree! (See below). In fact I had to chime in with more thoughts.

We have all seen them... overpriced and out of the market but still in MLS. Before going on I have to subscribe to full disclosure and that is I have had a few too... but some of the ones I see I would be embarrassed to have listed at that price. So whats the deal?

First from "04 to now, even with recent attrition there are a lot of comparatively new agents that just have not really dealt in a flat or declining market. Throw in lack of training (that is another topic) and they know how to sell based on price only. Next there are unreal expectations on the part of sellers. This can be charterized as "sure the market is down but my house is better than average and nicer than the one across the street that sold for $600K two and a half years ago".  Then there is the people that are buried in their home loan and need to sell and perhaps the agent is trying to accommodate them but in the end as it moves to a foreclosure did they really help them?

I work with a partner. We ALWAYS do listing appointments together. We also do our own pricing independently and then we speak openly and frankly with the seller. Or as my partner puts it "many times we need to back the hearse up and let them smell the flowers".

We take the view that we are the professionals. We are not just called in to sell the house but to advise the sellers. Advise as to price, marketing, pitfalls and whether or not they just want to sell or need to sell! In fact we tell our prospective sellers up front that if they only think they would like to sell, in our market, today, is not something they should consider. I want to point out this is not done in negative terms but frank and unvarnished advice from what we hope will be regarded as trusted advisers. Yes we talk all the benefits and the pluses... but do not get carried away. Neither the sellers nor the agents set the market... the market is the market and it can be pretty tough at times. It is also important that we as agents do not "own" the problem. We have to keep an open and unbiased attitude.

Next we discuss a rather well thought out and documentsd CMA. Being sure to try and keep numbers within a six month time frame and having prices both over and below our subjects recommended price. If you don't you will rue the day the apprasier shows up... in fact in our MLS data we can generate FNMA 1004MC statistics and we make that part of the presentation.

Then we discuss the house itself. If it isn't ready to show and I mean ready to show we do not list it until it is, or we do not list it. Again we help the seller to understand that in their price range being third best will not sell the property... first MAY but third will not.

We look at the market as we set the price and realize we are looking at historical data... i.e. old. If the market is in decline then the data is not current as of today. Add to that the fact it may be another month before the property is truly on the market and being actively shown, we may (and usually do) lobby for a price lower than the comps will indicate. To that end we always have a sales proceeds sheet with us. We include in the proceeds (or lack of) possible points to the buyer, an allowance for repairs and 90 days carrying costs. This way the seller gets a good idea of what they are up against. If they know the worst after that things look pretty rosy (the old under promise and over perform).

It is not an art and at best a swag (scientific wild assed guess). But it is not a pie in the sky let's price it here.

There is a lot more to cover but for now Ill stop except for one additional item. I really feel that brokers have an obligation here too. If an agent is consistently overpricing you should step in with advice and guidance... I just saw a house in our market priced at 1.9MM for over 800 days and they just now dropped the price 150K.  Wonder what the broker, agent and seller all think. Agents need to be the professional and lead the seller... brokers need to be sure it happens. Then if all your work results in a price of 250 on what should be 210... just get up say thank you very much and call it a day... you don't need the problems!

PS here is the other post I mentioned http://activerain.com/blogsview/1314270/agents-help-price-homes-out-of-the-market-or-priced-to-expire