Are You Really The Reason The House Won't Sell? Maybe!

By
Real Estate Broker/Owner with Cornerstone Business Group Inc 0225086119
http://actvra.in/dtl

I had a client this past year who was stunned when I gave her the CMA for her home.  We were in the midst of signing a listing agreement, and I had prepared all of the things necessary to get her house on the market.

She had talked to me the year before, but when I told her what her house would sell for she went with another agent who convinced her she could get radically more.  Well, a year later and she was calling me back.  Unfortunately for her, the market had declined during that time in that area, and her house was worth less.

Her new CMA was approaching $100,000 less than the original CMAJ. Phillip Faranda posted an excellent blog on pricing a property right.  (Compelling Reason to Price Your Home Right from the Start)


In that blog he posted a graph of what the variables are over the course of 120+ days when a house sits on the market.  That  information should be included in every listing presentation we make in the future. 

Seller afer seller will have a dollar amount in mind when they call you to list their property.  We need to be frank with them about price in the beginning.  I know a lot of Realtors who are so hungry for listings they will accept the homeowner's opionion over their own Realtor commonsense.  Friends, there some very negative consequences in making that choice.

  • The house can lose value over the months, and in some cases years, it sits on the market.  The one in my illustration lost over 30% in a little over a year.
  • The house may go into foreclosure if the sellers are trying to sell an upside-down house through a fair market sale.  Make sure you get all the details before you take a listing.  Some sellers will tell you enough to take the listing, but they may not tell you enough to know their situtaion.  You may need to steer them to a short sale to save their future pain.
  • The house becomes nearly unmarketable because it becomes stigmatized by other Realtors and people who pass by it month after month.  "I wonder what's wrong with that house?"
  • The house can deteriorate if it's empty. 
  • The house can cost you money if you're paying for adversting.  How many months can you carry advertising expenses on an overpriced house?  I had client who expected monthly paid advertising on her listing, but the total commission would have been less than 6 months advertising.  Count the costs.
  • The house can cost you a potential new seller in the future.  Neighbors driving by that sign for 3,4,5,6,7 months begin to wonder what's wrong with you because the house hasn't sold.  You must be doing something wrong.  You must not be marketing it right.  You can't be doing your job.  Other houses are selling, but you can't sell this one.  Your name becomes stigmatized.

I'm sure you could add to the list, but you get the idea.  It's better to walk away from a potential listing than list a house that will simply not sell.  I realize everyone can use more business, but none of us need
business that will undo our business.  Just say, "No!" when a seller wants to control how you list, market and price a property.  You're the expert.  Dazzle them with your insight and knowledge, and if you can't, walk away.

close

Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Mark Brian 07/06/2011 05:09 AM
Topic:
ActiveRain Community
Location:
Virginia Frederick County Winchester
Groups:
Active Rain Newbies
VIRGINIA
"Whacked"!!!
Addicted to Active Rain
Bananatude
Tags:
listing
price
mike cooper
real estate agent broker winchester va

Spam prevention
Show All Comments
Rainmaker
232,151
Jayne Esposito
Coldwell Banker - Morgan Hill, CA
SRES, GREEN

YES, YES.....to what YOU'RE saying that is! I know there are agents who will take an overpriced listing just to put the sign up and get the calls. I agree with you...this would undo a business much more than build it!

Jul 06, 2011 08:54 AM #56
Rainmaker
607,555
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Holding back that "told you so" comment must have been hard for you.  It's sad to think that they could have netted a whole lot more money if they would have been open minded at the beginning.

Jul 06, 2011 08:56 AM #57
Anonymous
Brian Park

Sometimes you just have to be blunt. I was recently asked by an agent in the state I'm in now to go along with him on a listing presentation and observe. He is the kind of agent I would use.

Well of course the seller was the I paid X and this many years later it should sell for Y type. Well I couldn't take it any longer and finally asked do you want to sell this house to cure some financial problem? Answer no. My response, well that's a good thing because your never going to sell it, do you want to know why? Answer yes. My response, because you are going to outbid any offers you may get. or would have gotten. And why would any agent in their right mind take such a listing, Simple they think you will see the light and reduce it to a marketable price and get it sold when you see it is not selling. Trouble is during that time you will have probably lost the best buyer prospect for your house.

So the question I would have is are you going to remain a stubborn idiot and keep shooting yourself in the foot,, or are you going to get it sold so you can do what you want to do? (they had equity) If your really happy here and really don't need to move then quit calling agents out here to find one who will list it at your price. There are always agents who hope by putting a sign in your front yard they will find a real buyer prospect for another house to deal with, and maybe, just maybe, you will have a revelation and price it a price you need to have to attract a real buyer. But if that doesn't happen then you will have put yourself through a lot of unwanted inconvenience for nothing.

Even if a real buyer gave you  best price offer for this current market place you would think they were trying to steal it because you would have mentally got married to a unrealistic price and refused to get a divorce. That price you came up with may include lots of things that a buyer isn't willing to pay for like your fond memories of living here with your beautiful  wife and your children but your emotional attachments are not worth an extra dime to a buyer. I'll tell you what, I had my say, you didn't ask for my opinion an neither did my friend here, But it drives me crazy when people drive with the break on, so  I'll go sit in the car and while I'm out there I''ll look for Aladdin's Lamp, and if I find it I'll let you use it to wish that your house will sell at your wish price. Of course even if you found such a buyer the deal will still fall apart if he needs a loan when the appraisal isn't high enough, and if you wait until 2014 maybe you can get it then..

Forty five minutes later he came out with a listing and a added clause that he would keep me away from them and their business. An a suggestion that I return to California.

Jul 06, 2011 09:29 AM #58
Rainer
56,519
Suzanne Martin
The Cascade Team Real Estate - Issaquah, WA
Your Seattle Area Real Estate Broker!

Thanks for the posting.  I agree as to be upfront about the price of a house.  That's the way I have always done it.  I won some and I lost some; however, sometimes it's okay to go a little higher than what we think it should be listed at as long as the seller knows that if we don't get any action within a reasonable period, then we will reduce the price.

Jul 06, 2011 10:58 AM #59
Rainmaker
1,256,576
Mike Cooper
Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Sales Pro

Jonathan, do you have a Comic Sans story to tell?  If your market has turned into a sellers market you are blessed!  Great to hear!!

That is so true, Karen.  Things seldom stay that stable.  Thanks for commenting.

That's a great question, Kathy.  It is rare when it works out. 

Right, Bill. I've done that only to have my sellers decide they like that price.  Unfortunately, no buyers did.  8-)

Michele, that's a great story.  Your opinion has gone up in value to that seller.  Good for you!

Too funny, Brian.  You know it's going to be a challenge when they start that way.  People really need to have a reality check.  I also want to get them the very best price possible. It doesn't benefit me to sell it for less.

Susanne, you're smart to get it out up front.  It does no good to waste your time and money on an overpriced listing.  Thanks for stopping by!!

Jul 06, 2011 11:36 AM #60
Ambassador
1,396,288
Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

30% decline in one year. Wow. It does not matter what the price was a year ago all that matters is what the market says NOW.

Jul 06, 2011 12:06 PM #61
Rainmaker
1,256,576
Mike Cooper
Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Sales Pro

Absolutely, Erica.  The CMA for that house is about $139K down today.  She never did sell it, and I won't take it at the price she wants to sell it for. 

 

Jul 06, 2011 12:24 PM #62
Rainmaker
627,999
Patricia Aulson
BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH
Realtor - Portsmouth NH Homes-Hampton NH Homes

Hey thanks for the good post today.  I've enjoyed reading it .

Lots of good comments as well to think about.

 

Patricia Aulson/ Seacoast NH & ME

Jul 06, 2011 01:17 PM #63
Rainmaker
627,999
Patricia Aulson
BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH
Realtor - Portsmouth NH Homes-Hampton NH Homes

I've bookmarked this post for future reference, thanks again.

 

Patricia Aulson/ Seacoast NH & ME

Jul 06, 2011 01:17 PM #64
Rainmaker
1,256,576
Mike Cooper
Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Sales Pro

It's my pleasure, Patricia, and thank you for the kudos! 

Jul 06, 2011 01:19 PM #65
Rainmaker
185,424
Cameron Wilson
Labrum Real Estate - Murrieta, CA
The Short Guy - Murrieta,Temecula,Menifee Californ

When a seller will not look at the comps realistically and be honest with themselves the only left for the agent to do is decline the listing.

Jul 06, 2011 03:01 PM #66
Rainmaker
506,873
John Elwell
CENTURY 21 Bill Nye Realty, Inc. - Zephyrhills, FL

You are preaching to the choir. The less professional agents who will take over priced listings will not even see themselves portrayed here. I know of one agent and she keeps saying over and over "sometimes you have to take overpriced listings". What??????? Is there a gun to her head. No, we never have to take an overpriced listing and it usually is not in our interest (or the sellers) for that matter. Yet I know some agents with 30 listings and NONE of them are selling.

Oh well. As you found, When the first agent gets the boot, they sellers may come looking for the agent that told them the truth way back when.

Jul 06, 2011 03:02 PM #67
Rainmaker
683,839
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

I so agree with you. I also think that often an agent can do everything right and the house still might not sale, especially in this market. Sometimes it is just a matter of getting the "right" buyers to see the house.

Gretchen

Jul 06, 2011 04:18 PM #68
Rainmaker
674,245
Hella Mitschke Rothwell
(808) 226-1095 or (831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

I just recommended to a seller to take his house off the market if it couldn't be priced right. And he agreed.

Jul 06, 2011 04:23 PM #69
Rainmaker
381,764
Michael Eisenberg
eXp Realty - Bellingham, WA
Bellingham Real Estate Guy

Sometimes it pays not to take the listing, Some agents will inflate their sellers price raising their hopes and ruinin g their chance to sell

Jul 06, 2011 04:46 PM #70
Ambassador
1,996,069
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Mike - We really do need to look at what makes sense, and we need to provide sellers with a reality check.

Jul 06, 2011 05:32 PM #71
Ambassador
3,248,173
Jeff Dowler
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Listing a home that will not sell due to pricing and other issues is NOT more business. It's NO business.And should be.

Loved this article, MIke. Good job on covering the key issues. And for mentioning J. Philip's post which I missed but will certainly check out.

Jeff

Jul 06, 2011 06:16 PM #72
Rainmaker
1,256,576
Mike Cooper
Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Sales Pro

It's definitely the best choice, Cameron.  Thanks for stopping by.

John, I know exactly what you're saying.  I've seen it a lot. 

Gretchen, you're right.  Even a well priced, well staged, well marketed house can sit.  Thanks for commenting.

Good for you, Hella.  You did the right thing.

Michael, it happens all the time.  It's a lose-lose play. 

Christine, well said!

Thanks, Jeff.  Enjoy J. P. blog.  It was excellent!!

Jul 07, 2011 12:10 AM #73
Rainer
32,054
Tracy McPeek
Cottonwood, CA

This story is all to common.  I have also lost listings to agent's who have bought the listing and in each case that I've followed I get the "I told you so" moment that just reinforces my decision to not list.

Jul 07, 2011 11:54 AM #74
Rainmaker
1,256,576
Mike Cooper
Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Sales Pro

Oh, I know that "I told you so" moment, Tracy.  I try to keep to myself, but it is really tempting to blurt it out loud!!  Thanks for commenting!

Jul 07, 2011 12:15 PM #75
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,256,576

Mike Cooper

Your Winchester, VA Real Estate Sales Pro
Winchester has a place for you! Call me.
*
*
*
*
Spam prevention

Additional Information