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Sellers make bad financial decisions and want buyers to pay the price....huh? (Updated)

Recently, I had the opportunity to list a house. The numbers (CMA) pointed to a healthy selling price in the $240's. The owners, however, claimed they would lose out financially if the house wasn't listed in the $280's. You see, they borrowed $30,000 on the equity of subject house to build a new house in the country. So, they refuse to lose money on this house. What they don't realize, is that their thinking is absurd. The $30,000 in equity from the subject house is truly invested already in the new house! THIS GAME DOESN'T WORK! In a buyers market with a large inventory to chose from, coupled with slipping values, sellers need to be accountable to themselves for the financial decisions they've made. Price has never equaled: Price paid+ cost of work done+ selling expenses. And in this market, it certainly doesn't mean all that plus the home equity loan they took out 18 months ago to build a new house!

Our policy is to take on healthy listings and turn down unreasonable prices. I've been to a number of broker opens where other Realtors have said they have the same policy. Of course, you all know the rest of the story. An eager agent jumped right in and took the listing at the price dictated by the buyers. Good luck, buddy!

UPDATE: As of March 08, the house is still on the market, and now listed in the $230's! How many months of mortgage payments have the owners made? food for thought!

UPDATE: SOLD SOLD SOLD $200K. WARNING - PICKING THE REAL ESTATE AGENT WHO GIVES YOU THE HIGHEST ESTIMATED VALUE OF YOUR HOME IS THE WRONG WAY TO GO! Had this consumer started in the $240's, there would have been more activity and it could have sold sooner, rather than going stale while moving closer to the price range it should have been in. Grrrrrrr!

Posted by Natalie Langford, Winchester, VA Real Estate on 09/20/2007 08:08 AM

Comments (11)

setting listing price, cma, pricing your home right, northern virginia realestate, real estate, natalie langford

11 Comments on Sellers make bad financial decisions and want buyers to pay the price....huh? (Updated)

Good for you, turning it down! So many people have used their homes as ATMs and they don't understand that nothing's free in life...hard lesson to learn. And that agent who took the listing, bless her heart.

09/20/2007 08:11 AM

by Leigh Brown Charlotte NC Broker/Owner (RE/MAX Signature Properties)

Natalie:

What? You mean the seller shouldn't expect the buyer to pay for their 2 week European vacation they put on their equity line?

09/20/2007 08:18 AM

by » Bill Burress Nationwide Mortgage Originator

I am constantly amazed that sellers think what they "need" to sell them home for has anything to do with the market price. We patiently explain, but when that doesn't work, you have to just say no. Good post.

09/20/2007 08:21 AM

by Nancy Moeller (RE/MAX Real Estate Services)

I hear ya! I'm not wasting my time - my new marketing campaign is buyers. Half the reason is so that I can be selective on the selling side.

An agent told me last month that they (her/her office) were not taking overpriced listings. I keep hearing this. Literally, the next week one of my neighbors homes went on the market, which I was suprised it sold at $334,000 in 2005, for $420,000. No known improvement that I know of.

I'd love to move. But I know I can't ask the price for my house that I need to do so.

09/20/2007 08:24 AM

by Judi Glamb, Associate Broker, ABR (Coldwell Banker Hearthside)

People listen to what they want to hear! They will interview agents until the one who sing their songs arises from the pile. Well done, Natalie!

09/20/2007 08:52 AM

by Gary Waters - Real Estate Agent Viera Suntree (Century 21 Baytree Realty www.moving2brevard.com)

Hi Natalie! I have this going on in three of my listings currently. We are chasing the market down and they are all at their absolute rock bottom prices because of equity extraction! I would have never advised clients to take money out of their homes so they can purchase right now. They need to be mentally and financially prepared to take on a rental property or other means of selling like OWC or lease option to purchase if they can't sell through "normal" means right now!

09/20/2007 09:17 AM

by Renee Burrows - Las Vegas NV Real Estate (Nevada Realty Solutions)

Glad to hear all of your comments. I'm happy I wasn't the one who supported their new construction actions in 06! Renee, you raise a great point.

09/21/2007 02:31 PM

by Natalie Langford, Winchester, VA Real Estate (Realty Direct of Shenandoah Valley)

AMEN! I just recently turned down a listing because they wanted to list it too high!

09/23/2007 04:30 PM

by Michael Klijanowicz - Relocation Specialist - Baltimore & Harford County (Baltimore & Harford County Maryland - Long and Foster )

What I don't understand is that Sellers are refusing to listen to educated agents because of their pricing agendas; however, don't they realize how many months this will delay the sale of their house? In turn they are paying out mortgage, taxes, interest, etc. that could be saved if priced right. Just common sense to me.

10/05/2007 09:08 AM

by K.C. Cammer Shenandoah Valley Real Estate (REMAX Team Realty)

GREAT POST! I am with you on passing up the unrealistic sellers. The ONLY thing that gets me is when they go through a few agents and then end up selling it for the price I recommended to begin with. :-)

10/16/2007 12:06 PM

by Elizabeth Nieves - Bilingual Raleigh - Durham North Carolina Real Estate Team (The Elizabeth Nieves Realty Group @ Keller Williams)

Natalie, it happens here in Texas all the time! I just say Next!

11/03/2007 08:44 PM

by Linda Scanlan ~Selling All of North Texas (Hall Team Homes)

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