I just returned from a listing appointment where the seller told me he had to get a certain amount from the sale to "break even" with the money he put into it. After a long discussion, I did not take the listing. If my job is to work for the seller(s) to sell the property, I would be derelict in my duties to take an overpriced listing in today's market. Even if we listed it at market value, it would be over priced in 6 months since the values are still dropping. Mike Cooper's post on overpricing homes is great and relevant to Salida Colorado.
As Realtors, we talk about overpricing a lot.An overpriced house is a lonely house. It soon becomes stigmatized and ignored by most Realtors. If it receives low offers that are countered by an insulted seller it will also acquire a reputation as a house that is not worth the trouble.
I had a seller in 2010 that wanted to list his house just slightly too high. It was about 10% over market, and we had discussed a system of moving it down over a designated time. That never happened, of course. It was the last house I ever overpriced.
It was at the time when the market was just starting to experience a new wave of price weakness. If I had run comps 45 days after list, the list price would have been lower. Anyway, I received an offer within the first two weeks at 94% of list. He countered twice and lost the sale. It was over $500.
Nearly a year later I still had the listing, and it was still overpriced. The market had fallen even further. I negotiated with the seller to lower the price, and I committed to drop my commission 1%. At that point, I just wanted to get rid of it.
Again, he received an offer within days of the new price, and again he countered with an unrealistic counter. The buyer walked without a counter. When the listing came up for renewal, I declined. It was re-listed 3 months later at $100 less than my previous list.
It finally received a contract that was below my second lower contract. The point of this blog is this, if you insist on overpricing your property when good comp information shows that properties are not selling at that price you will ultimately get less.
This seller lost $32,000 by continuing to believe that a buyer was willing to pay 30% more for his house than the current market comps.An overpriced house that lingers on the market will ultimately cost the seller more than if he had priced it right to begin with.
It happens everyday in this industry, and yet, good agents still have a hard time convincing a seller that an overpriced house is a lonely house.The best way to help them, is to not help them. Walk away and save yourself the frustration of seeing the next agent sell the house for the price you recommended. An overpriced house often brings less than a well priced house.
Better Homes and Gardens Real Estate Metro Brokers - Powder Springs, GA
Great re-post and every word true in my experience. Turning down overpriced listing is the best way to run your business, that way you are not run out of your business.
Thanks, Gary. Mike nailed it, didn't he? I once turned a listing down 4 times. On the fifth appointment she listed and we sold it in a month for 98% of sale price. She is as happy as a clam. That actually is the other side... they become very dissatisfied with us when we wade through the long process of servicing an overpriced listing, eh?
Edward, I have actually used overpriced homes (overpriced by other realtors) to show my buyers what a good price is and is not.
Yvonne, that is what Mike said! (it was a repost and did not happen to me). I have seen this happen on one of my listings. They would not negotiate at all once they got the price where it needed to be. That listing (not mine anymore) is still for sale and has become overpriced again because of the market.
Selling Northwest Houston to good people like you!
I have to agree wholeheartedly with your analysis of mike's post. We personally are priced slightly under market and have been on the market about 2 months with only about 6 showings. Location is good, we've remodeled most of the house. It's just the market and it seems to be stagnant though about half of the showings we've had were this week. So optimism is the keyword here. Pricing it right to start is the key..... especially in a tenuous market.
Dave Halpern Real Estate Agent, Inc., Louisville, KY (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert
Brilliant post! It is also relevant to foreclosing lenders who demand more than market value for houses in short sale. The house stays on the market until eventually it sells for many thousands than original short sale offers.
Jeanne and Ralph, interesting to see your market in a simlar state as ours... And, whew, I hope your showings keep up with what happend this past week for you!
Dave, I didn't even think of that point! I thought most of the ridiculous pricing was over and done with... although I had a chase loan that was wonky.
new wave of price weakness. If I had run comps 45 days after list, the list price would have been lower. Anyway, I received an offer within the first two weeks at 94% of list. He countered twice and lost the sale. It was over $500.
willing to pay 30% more for his house than the current market comps. An overpriced house that lingers on the market will ultimately cost the seller more than if he had priced it right to begin with.
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