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If Ever the Mistake of Overpricing Was Obvious, It Sure Is NOW!

By Wanda Thomas

Real Estate Agent with Montana Homestead Brokers, Broker, CRS, GRI, SFR, RN

October 13, 2010 09:31 AM

I've heard, and understood for years that when a home starts out overpriced, it usually either doesn't sell, or it sells for less than what it would have sold for, if priced right to begin with.

Did I loose anyone there?

This was the REALTOR TALK on our office tour to various homes today. Our local real estate market in Billings Montana is just really odd right now.

only a little over 40% of listed homes sell
open house traffic is pretty slim, doesn't seem to be bringing out real buyers, just tire kickers
homes that have been on the market for awhile and haven't sold, are still on the market, even with price reductions of more than 10%
homes that have been priced aggressively (below the market value) are selling in under 2 weeks
home sale price of some homes that have been price reduced by even 10% sold for even less after very lengthy days on market

I have grown up in Real Estate learning to make an impression on a seller that they will get a better and quicker sale if they price their home right the first time.

sold home I tell ya, I think some people worry that I'm trying to pull one over on them. A couple of those same people listed their homes with a different firm, at a price they liked better (higher of course), and there the home sits, NO SALE, NO OFFERS, EVEN AFTER 3 PRICE REDUCTIONS!!!

You buy and sell in TODAY'S MARKET!

It's very comical to listen to potential seller's tell me that they want to sell their home for a price that is over valued in today's market, but they want to buy a home undervalued in today's market!

You buy and sell in TODAY'S MARKET!

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Linda Metallo DiBenardo

RE/MAX Impact, Lockport, Illinois - Lockport, IL

Uncanny, your market place sounds just like mine. The only difference is you have a higher percentage of homes being sold, here it's more like 15-20% in the southwest 'burbs of Chicago.

Oct 13, 2010 09:38 AM

Don Spera

CR Property Group, LLC - East York, PA

Serving York and Adams County, PA

We all have a unique market trend in our area, but in a lot of ways there is a similarity as well. I just wrote a blog about "who is your driver's seat" that would be very relative to your post.

Oct 13, 2010 09:48 AM

Stephanie McCarty

McCarty Homes - Canton, GA

REALTOR

You are so right. I've lost about half a dozen listings this year that I would like to have had because the seller wanted to start with a price that was completely unjustified. The concept of wanting to take advantage of this market on both ends just baffles the mind - I try to explain it but each one is convinced that their home is so special they are going to make out on both their sale and their purchase. I've even had one tell me that if an agent can't make it happen they'll just keep looking until they find one who can. I was nice and decided not to reply to that!

Oct 13, 2010 09:50 AM

Wanda Thomas

Montana Homestead Brokers, Broker, CRS, GRI, SFR, RN - Billings, MT

Billings Montana Real Estate

Holy cow Linda, even at these interest rates it just boggles the mind that more isn't selling

Don I liked your post as well, no one moves, or gets paid unless the sale happens! Listing does not mean sold!

Stephanie, we do just keep going round and round trying to help buyers and sellers review what they are trying to do on one end of the sale is the same market condition on the other side! Can't get paid if you can't sell it!

Oct 13, 2010 09:57 AM

Mike Saunders

Retired - Athens, GA

Wanda - clearly stated, you have to be priced very right in today's market, especially when competing with REO's and short sales.

Oct 13, 2010 10:47 AM

Mike Morrison

Will & Will Real Estate Brokers, The Woodlands, Texas - Houston, TX

Wanda, there is such a disconnect between buyers & sellers. The seller, no matter how much you try, thinks I'm not going to take less than X amount for my property. The Buyer knows this is a Buyers Market. So the disconnect...

I, have refused listings because the Seller has an unrealistic fantasy about how much their property is worth. WHO SAID REAL ESTATE WILL ALWAYS APPRECIATE ??? I'm lookin for that guy!!! Sadly, some agent will take the listing at the Sellers Fantasy Price. Thus, the disconnect is cemented and sets up the 'house that never sells".

Oct 13, 2010 01:29 PM

We have nearly passed the REO and short sale deluge here in our part of Montana, but there are more and more each day. I am often asked "well they won't use that REO as a comparable for mine will they?" Ummmm yes!

Mike I like the term Seller's Fantasy Price, how true! I wish prices never went up so quickly, then they wouldn't have fallen so quickly!

Oct 13, 2010 02:00 PM

Chris Dugger

Real Estate Marketplace - Louisville KY - Louisville, KY

Louisville REALTOR

Wanda ~ It's difficult to get sellers to understand...and it's more difficult walking away from that listing because my business just can't afford another overpriced listing. I had to walk away from one tonight...$28k overpriced, or 9%, and I just couldn't do it. As far as only 40% of homes selling...the best it got in Louisville in 2005 was 54%, so I'm pretty comfortable with out 47% now!

Oct 13, 2010 05:40 PM

47% of listed homes selling is fabulous Chris! And you are right about doing business, if you can't make money, you can't spend time and money!

Oct 14, 2010 01:31 AM

Elyse Berman, PA

LoKation Real Estate - Boca Raton, FL

Boca Raton FL (561) 716-7824

Wanda, We hear the same stories from sellers here, that their house is better than all the rest. It may be, I tell them, but no one is willing to pay for it in today's market. In Florida, they are competing with short sales and foreclosures and, unless they are priced aggressively, they sit.

We also have agents who take higher listings and wait the sellers out for price reductions.

Oct 14, 2010 02:43 PM

If Ever the Mistake of Overpricing Was Obvious, It Sure Is NOW!

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