Selling Above What You Paid For It | Aversion for Selling at A Loss | Decision Time For Sellers

Jim, I appreciate your answer, but you might consider making it a post. It is almost that already. I would still like to see higher standards for real estate licensees.

Bill Roberts

Jim,

We have all seen that line in the sand.  It took me a year to figure out that taking an overpriced listing is just a waste of everyone's time.  If a listing prospect refuses to see the reality of the market then the home is unlikely to sell.  It does no good to draw a line in the sand above the high tide mark and then wait for the tide to come in!

I think we are hijacking this post!  Higher standards for licensees....  Hmmm... like maybe an apprenticeship program or more than 15 hours per year to maintain a license?  Or higher barriers to entry like more than 10 days to get a license?  I still remember sitting in my class about day 5 saying "what exactly is protecting the unsuspecting public from me?"  After this very brief period of time where I learned many things I actually consider important, though I learned absolutely nothing about my job, I realized we have a very serious problem in the industry that the states should be much more proactive about.  Our economy is so real estate based that the work we are currently doing is simply too vital to leave it to someone who took a 10 day course and then hung a license with someone for the lowest fee possible and zero barriers to entry.

And the Atlanta market is a very broad example of that to its long term detriment.  I've read the national press on the widespread devaluing of property and even if half of what they say is true, no, it won't recover for a very long time.  There are neighborhoods here where I can track problems due to Realtors who had little or no knowledge of what they were doing and the result is 1/3 of the properties owned by the banks and tanking values.  All the parties to the transaction were at fault but I see every day how much influence I have and place a very high value on being as just and fair as I can be.  By everyone ignoring that in the past we now have so many areas where the Realtors are complaining about the bad market, the very one they helped create!

I'm also realistic to the fact that it's just not likely to change.

Jim - Those who draw a line in the sand and price too high to begin with usually end up chasing the market down. This is where they lose the largest percentage of money.

It is difficult today with the negative press and the inuendos by the media. I read a local comment the other day about agents accepting the blame for the market we are in. In fact, Indianapolis is not a bad market, except the news would have you think it is. The people who buy now will be happy they did in a few years. That goes for sellers too. If they sell now, they will more than make up the loss with their purchase.

Jim - great post! And for the record, you are correct about the Northern Virginia Transportation Bill (HB 3202) and the increase in the Grantor's Tax from $.10 per $100 to $.50 per $100.  In a time when sellers are struggling in this slowing market, this bill is leaving many of the localities affected fuming mad! 

In regard to your post, I've found that it's not enough to show comps.  Compelling data with regard to absorption rates has proven to be a very valuable tool during my listing presentations.  The proof is in the pudding.  If only 100 homes have sold in a particular price range and area within the last 6 months and there are 200 homes currently on the market, the picture is BLEAK...a 12 month absorption rate. 

After giving this information if I'm met with, "Well, I put a lot of money into this house over the last 3 years and I need $XXX,XXX to move to my next house. I will list it for $(INSERT INSANE AMOUNT HERE) and I want it in 3 months!" I am only too happy to say, "Well, then, I don't think I will be of any help." 

Jim - I'm with you on listing periods.  If the seller isn't motivated enough to give me appropriate TIME to market their home effectively, then I know they aren't motivated.

As for the tax increase, yes, it's definitely ludicrous.  There is a great site (which I think I will blog about) with an organized online petition to this bill.  There are plenty of online petitions but I don't know that status as of today.  I think I'll spend today researching it because you're absolutely right, this is a catastrophic mistake in a downturning market and it's going to only hurt the overall economy here.

While I agree in principle with your statements about pricing and condition, I must disagree with your comments about "They just placed their listing in the hands of someone that will do nothing to sell their home.  A real estate kiss of death!" when you refer to Brokers that take reduced fee listings. 

That is a self-serving unsubstantiated statement with no statistical facts to back up such a broad-sweeping indictment of your competitors. The simple truth is that an overpriced listing will NEVER sell regardless of the exposure by any Company or individual agent. With over 100,000 homes for sale in the Atlanta market, it becomes painfully obvious that a reality check is in order for sellers and one of those realities is that, regardless of the market, over 90 % of the sales are accomplished by an Agent with a buyer "in tow"! Proper presentation on the MLS systems here in Atlanta combined with a reasonable price and a good photo tour of a home in good condition will increase the odds of getting a home sold regardless of the listing fee paid to ANY Broker or Agent! I have heard this argument presented as a "statement of fact" since I was first licenced in 1971 without any merit whatsoever then or now.

Jim: Another great post. In general there is a serious disconnect between what sellers hope and wish to net and what the market will support. Sellers are happy to take advantage of a strong bull market but when it plateaus and begins to soften, they still hold out hope of making a life changing profit on the property.

There was a time I let sellers exert significant influence over price.  I learned very quickly that was a losing strategy. Now I tell sellers, in a subtle way, to get on board or they lose the opportunity to have me represent them.  I'm the expert in the room; I'm one with the credentials, the training, the experience.  I'm paid very well for what I do, but I do not work with people who refuse to accept my advice.

I also want to comment on Bill's "proper presentation on the MLS systems..."comment.  Part of what we get paid for is positioning a clients property in the market; the MLS is but one component. That takes capital to do effectively; capital most discount brokers don't have when they charge a $250 fee.  The other component is being there to move the property from contract to closing, which the discount brokers in our area leave the sellers to figure out.  Definitely the real estate kiss of death.

Jim,

Perhaps we could use some of your listings and sales as an example of how a superior listed property presentation and Great Agent approach can increase the return a seller may receive. I would be very interested in some concrete facts from an expert such as yourself.