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This Place is Overpriced!!

By Jeff Dowler, CRS

Real Estate Agent with eXp Realty of California, Inc. CA DRE #01490977

March 24, 2013 10:31 AM

This Place is Overpriced!!

Ever heard that before? Or perhaps said it?

I have.

This place is overpriced Sometimes it’s true. Sometimes not.

“This place is overpriced” has been a common phrase for quite some time, particularly during what was our declining market these last 6 years. Perhaps it always will be. It’s not unlike uttering “I’m just looking” when accosted by a sales person in a retail store.

It sounds authoritative, like it’s coming from someone who is in the know. That may be, in some circumstances.

But more often it’s an utterance from a buyer who has no clue about what is going on in the market, especially these days. Or it’s intended to downplay any real interest. And to be dismissive. I suspect some will ALWAYS say this, no matter how well priced the property might be.

This place is overpriced I just stopped by an open house in my neighborhood for a 1754 SF 2-story home with wonderful hill-top views, expansive yard and an interior that was in very nice condition, on a cul-de-sac.

The agent had a very busy day yesterday and was expecting the same. We chatted a moment and she commented that the buyers who just left said “this place is overpriced.”

As someone very familiar with what is going on in the Carlsbad housing market in terms of inventory and sales prices, I had to chuckle.

The price? $575,000. While that may sound high for some areas around the country, it is a good price on this particular view home in a popular neighborhood I suspect will likely get multiple offers at and above asking.

The agent did her homework, the seller was reasonable and this home will be gone quickly, like so many others in the Carlsbad real estate market.

I see “this place is overpriced” as an open invitation to share the details of what is happening in the market, to see if that really IS the case or not. A time for education, and perhaps the opportunity to find out why the consumer might feel as they do. Buyers need to become as edcuated as possible, particularly in this market, so they understand what's taking place.

And of course have a knowledgeable agent who can help them determine IF "this place is overpriced." It simply is not always the case.

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Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

Pat - there was a time that would have surprised me but no longer

Kathy - :)

Betsy - you have to wonder at how serious they are. The desire to buy may just not be strong enough

Ginny - so true. And appraisers here seem to be aware we are in an appreciating market

Nina - sometimes even when presented with the facts from the MLS some are still not believers but have to find out the hard way.

Jeff

Mar 25, 2013 12:00 AM

Tammy Lankford,

Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA

Broker GA Lake Sinclair/Eatonton/Milledgeville

You are completely right. And I have had buyers who become believers and "see the light" and begin to understand the MLS data and others who insist "but my friend bought at this price" who I believe will NEVER own property at Lake Sinclair.

Mar 25, 2013 12:40 AM

Richie Alan Naggar

people first...then business Ran Right Realty - Riverside, CA

agent & author

One thing is for sure...over pricing gets attention. Whether it gets someones checkbook is another matter...Lots of activity going on

Mar 25, 2013 12:49 AM

Richard Arnold

Keller Williams Realty East Valley - Tempe, AZ

Realtor - Tempe, Chandler, Mesa, Gilbert, Phoenix

“this place is overpriced” - As soon as you hear the words, you know you've met a Buyer who did not have a consultation with his Realtor®, a Buyer who only called a number to get someone to open a door, a Buyer who wants an undefined "Deal" with no idea about the details.

It's a great opportunity to ask him what he knows about the neighborhood and start him on the path to self-realization that he doesn't even know how much he doesn't know.

Mar 25, 2013 01:14 AM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

That is a common statement and I always like to ask the buyer where they got their information. You need an agent to give you the CMA and show you whether that's a true statement or not..but arbitrarily stating this home is overpriced with no education behind it means that it's overpriced for that buyer in particular lol :).

Mar 25, 2013 01:21 AM

Hella Mitschke Rothwell

(831) 626-4000 - Honolulu, HI

Hawaii & California Real Estate Broker

When I hear that, it's usually from a neighbor who has only seen the pricing of the last 6 years, or 20 years ago. How often have I heard, "I could have purchased this home in 19.. for $.. Well, maybe he should have bought it then, but even then, it was over his budget.

Mar 25, 2013 01:44 AM

AJ Heidmann ~ CRS

McEnearney Associates, Inc. - Alexandria, VA

YOUR Alexandria & Arlington, VA Real Estate Expert

Jeff - I agree that there will always be people that will say that... no matter what. For the most part I do think that is based on the buyers lack of context for what is happening in the market and it does present a good education moment... if they are willing to listen.

Mar 25, 2013 02:06 AM

Carla Muss-Jacobs, RETIRED

RETIRED / State License is Inactive - Portland, OR

I had clients tell me that a $169,000 property was "overpriced" . . . even though they were pre-approved for $200,000. Why? Because it didn't come with a fridge and a washer/dryer. This was a re-sale and those items would have been used anyway . . . I just don't get it anymore.

Mar 25, 2013 04:07 AM

Yvonne Jaramillo Ahearn, Esq. (B)

Hawaii Life Real Estate Brokers - Kailua, HI

REALTOR-Broker, CRS, GRI, ABR CLHMS

"It's overpriced" also can mean, "We like this place but can't afford it. Maybe we can't afford anything in this market."

Mar 25, 2013 04:18 AM

Jill Sackler

Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY

LI South Shore Real Estate - Broker Associate

Definitely meant to be dismissive and to have you as the agent become defensive.

Mar 25, 2013 07:14 AM

Gayle Beyer

Welcome Center Realty 772-336-8583, FLA777 - Port St Lucie, FL

Port St Lucie FL Real Estate Broker

In the Port St Lucie FL real estate market 90% of the time the clients believes it to be overpriced while the seller feels the opposite. Reality is though, prices are goind up w/ the declining inventory so perhaps a year ago it might have been true of a house today but for today's market it is most likely right on

Mar 25, 2013 07:34 AM

Kevin Mackessy

Blue Olive Properties, LLC - Highlands Ranch, CO

Dedicated. Qualified. Local.

Always need to look deeper at the property and what you're getting for the price. Sometimes the field gets clear when people drop off thinking it's overpriced.

Mar 25, 2013 09:29 AM

Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

Charita - well it really is that simple.

Scott - my guess is this comment is usually coming from a lack of knowledge. But certainly we still, even in this market, see a home whose price is NOT in line with the market, not matter how nuts it is.

Mike - absolutely. There are those surprises, and more of them all the time.

Brian - that is so true. If they would work with an agent who knows the market they might better understand what is going on and why, and what this means for them.

Gloria - that is a great comment.

Fernando - it seems to be the case in many markets. Good luck in yours!

Mitchell - sage advice for sure. Interesting what a little education and knowledge can do, huh?

Jeff

Mar 25, 2013 11:06 AM

Marc McMaster

RE/MAX Centre Realty - State College, PA

Putting my clients before myself

Sometimes when people say that it means, "I wish I could afford to buy this home but I can't." It's an easy way out for them.

Mar 25, 2013 11:46 AM

Bryan Robertson

Los Altos, CA

Every once in a while I still hear that comment and, like you, use it as an opportunity to educate the buyer on the state of the market.

Mar 25, 2013 01:01 PM

Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

Stan - good call. I suspect one hears this more often from buyers waling into open houses unaccompanied.

Michael - it's kind of a non-committal comment with no basis in fact.

Keith - one has to wonder what "overpriced" even means these days in some markets with the market shifting upwards

Edward - ah, yes, the cycles of real estate.

Karen - you are fortunate. You're right - I see the same issues with buyers coming from other parts of the country who just have no sense of what is going on in our market.

Andrew - true

Tammy - sad but true. Some never learn. And they will lose.

Richie - depends on the supply and demand.

Jeff

Mar 25, 2013 01:49 PM

Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

Rich - WELL SAID!! BTW the property in question went under contract yesterday after 4 days on the market.

Brenda - that is my approach as well. Perception is their reality but not necessarily the truth.

Hella - the old "could have, would have, should have."

AJ - I place more stock in "it's overpriced" when I hear it from agents, at least more than one. Not happening these days.

Carla - I think it is often just an excuse. And some people just never want to pay full price (it's overpriced) even when that IS market value, or below, as we are now seeing regularly.

Jeff

Mar 26, 2013 02:07 AM

The Williams Team

Keller Williams Realty - Mandeville, LA

985.727.7168 www.TheWilliamsTeam.com

Great Post Jeff!

It's great to see that me and my team members aren't the only ones thinking this!

--Louis Williams

Mar 26, 2013 02:19 AM

Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

Yvonne - I think that is sometimes the situation. Easier to admit than to say I can't afford to buy a home.

Jill - and it works, I think. I have asked people who have said this why and inevitably they can't really say. Or they justify using a home that is very different, smaller and which sold ages ago in the area.

Gayle - same here for the most part. It's pretty rare for a seller to think their house is actually overpriced, or at least to admit it.

Kevin - good point. When you really do look at the market you often find it is priced pretty well. But there are always some exceptions.

Marc - often the case. True for other things, too.

Bryan - I think it's the best approach and sometime you learn some interesting things about consumers' perceptions

Thanks, Louis.

Jeff

Mar 26, 2013 09:33 AM

Mary Stewart

HomeTrust Real Estate, LLC, Homes for Everyone - Wilsonville, OR

Wilsonville and Surrounding Portland Metro Areas

On the flip side...I listed a house for a good price as I had done the comps carefully, not once but twice within two weeks. I had an agent call me with "Your listing in Under priced, what is wrong with it". Nothing is wrong with the house it is just priced to sell, not too high and certainly not to low. We had one offer the evening it was put in the MLS and a total of 6 offers, Thursday to Sunday evening. It came in higher than listing price, but it will appraise just fine. Lots of activity because it was "Priced Correctly".

Mar 28, 2013 08:33 AM