Just changing agents won't cause you to sell an overpriced listing

By
Real Estate Broker/Owner with Cornerstone Business Group Inc 0225086119
http://actvra.in/44zf

I showed a property recently that was on the market for the better part of a year, and it was approximately 35% over the current market for a similar property. Of course, it didn't sell.  It went off the market, and then came back on at 25% over the market.

The second agent fluffed up the description to make it sound like it was really a bargain. She says it's, "Completely gone over!"  What does that mean?  It meant that the owner painted, hung one ceiling fan, had the floors refinished and changed the kitchen sink. That's nice, but it's still 25% over the current market, even with a reduced price.

This is a topic that gets a lot of airtime on Active Rain and other Realtor blog sites. Friends, please be honest with your clients. A house that is 25% over the current market is going to sit, get stigmatized and end up in the hands of another agent in six months. For some companies it's all about market share. The more listings they have, the more successful they look. Maybe, but if they never sell, that also gets around.

We're in the home selling business. If we're not selling these homes, we're in the home babysitting business, and unfortunately, unlike when you're babysitting for extra money during the 9th grade, it doesn't pay well. You are more likely to have potential future clients look at your listing sign month after month and decide you don't actually sell homes. You just plant signs like Spring flowers. I know, I've had my own garden.

Just like a hundred posts before this one, let me encourage you, please don't take overpriced listings. Overpriced listings are for FSBOs. We're in the business to move real estate. If we price it right, they will come. If they come, we will sell. If we sell, the market will recover.  

 

 

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Rainer
237,463
Jay & Michelle Lieberman
Keller Williams World Class - Agoura Hills, CA
Creating Calm in the Buying and Selling Chaos

Mike.  I don't.  But needed your post as a reminder because I have one possibly coming up in a couple days and I think your post is going to make me turn it down!

Sep 26, 2013 03:28 AM #27
Rainmaker
477,912
Karen Feltman
Cedar Rapids/Iowa City, IA Lepic-Kroeger REALTORS - Cedar Rapids, IA
Relocation Specialist

Love it!  The home babysitting business!  How true and sad is that?  And you are right, until all agents are honest with their sellers and refuse to take on these overpriced listings, the market will continue to slowly recover at a snail's pace.  Five years ago prices are gone, we have to accept it and force our sellers to accept it.  If they want to sell, they need to price to sell for today.  Great post.  Thank you for sharing.

Sep 26, 2013 03:56 AM #28
Rainmaker
1,549,175
Carla Muss-Jacobs, Principal Broker (503) 810-7192
BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time - Portland, OR
Buyer Focused ~ Buyer Results

A year . . . heck that's nothing.  I just write a post about a home on the market OVER 6 years!  Only two agents in that, but they didn't have the nerve, apparently, to tell the owners ther reality.  The home sat and sat.

Sep 26, 2013 04:50 AM #29
Ambassador
1,680,423
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

I get so frustrated when I see this. Especially, from those top agents who supposedly sell so much real estate. I've seen listings sit on the market for years with these agents.

Sep 26, 2013 07:26 AM #30
Rainmaker
1,068,760
Kat Palmiotti
Grand Lux Realty, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Unfortunately, there is always someone willing to take an overpriced listing, so this isn't an issue that will go away.  And once that house sits and sits, it gets harder and harder to sell. 

 

Sep 26, 2013 08:24 AM #31
Rainer
221,057
Matt Kombrink
RE/MAX All Pro - Saint Charles, IL
Top Local Realtor, Trusted Advisor

Great post, Mike.  Love the babysitting analogy.  This is something that will continue to happen though.  Some sellers can't come to grips with their home value and assume it's a lack of marketing.

Sep 26, 2013 09:32 AM #32
Rainmaker
543,631
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Mike, this is a great post. There are litteraly zero homes that sell way above comp prices, just because the seller wants or needs more money.

Sep 26, 2013 10:32 AM #33
Rainmaker
1,893,148
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

There is nothing wrong with an overpriced listing, as long as the seller is aware of it, so I guess I'm in the minority. It gets your sign in the yard so you get calls from buyers who will buy something else and still earn the listing agent a commission as a buyer's agent for that buyer. It gets your name out in the neighborhood, and other neighbors root for you to sell that home at that price and they might be willing to sell their home too. It gives the agent an opportunity to hold an open house and meet other sellers and other buyers in the neighborhood, and make a positive impression. It's a pretty good opportunity for a listing agent to do everything BUT sell that home. Unless by some miracle the seller finally decides to take his agent's advice and lower the price.

Sep 26, 2013 11:37 AM #34
Ambassador
862,893
Janna Scharf
Keller Williams Realty Coeur d'Alene - Coeur d'Alene, ID
Coeur d'Alene Idaho Real Estate Expert

wise advice, but it seems that some people will just never learn...

Sep 26, 2013 12:32 PM #35
Rainmaker
518,631
John Mosier
Realty ONE Group Mountain Desert - Prescott, AZ
Prescott's Patriot Agent 928 533-8142

There is a Broker in the area in which I work who owns three properties there.

He has a vested interest in holding prices high. He does not have a reputation for selling a lot of properties.

Because of his vested interest in holding prices up, I don't see how he could fairly represent a Buyer in his neighborhood.

Sep 26, 2013 01:22 PM #36
Ambassador
3,577,260
Praful Thakkar
eXp Realty - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Mike, it's funny when you say it (so rightly)

"We're in the home selling business. If we're not selling these homes, we're in the home babysitting business!"

Sep 26, 2013 03:48 PM #37
Ambassador
1,998,181
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M
Mike - We need to educate potential sellers as to the market alike of their home.
Sep 26, 2013 04:59 PM #38
Rainer
28,027
Brian Park
Park Realty Investments - Murray, UT

Well we know the first agent was desperate and dumb, and the seller had no trouble finding a second agent that was desperate and dumb. Of course we all know that lightning can strike or we can win the big lottery, but guess what, I haven't seen that happen but once in 58 years of investing and brokering. But my experience shows it can happen every 58 years so far, thats good enough for some agents I guess. I do believe that the agent thinks they will get a couple of buyer leads and a deal from the sign and maybe, just maybe the sellers will actually see the light.

It does give the neighbors a good laugh though and a chance to tell people they are asking x dollars for homes in my neighborhood and brag a little. One expired who called me and I was familiar with didn't like my comment of  look I know you home and I know you, I think you should just extend with your present agent and brush the cobwebs off your sign that is there now, and patiently wait the 6 or 7 years until homes start selling for what you want for yours in your neighborhood and buyers will even consider your price. This guy was on his 3rd agent, none of which even got a reduction of a dollar. He even got madder when I told him look, I like what your doing because when I get a prospect that wants to overprice by a lot I can drive them by your place as a good example of what not to do.

A few days late I ran into the wife in the drug store. She chewed me out for getting her husband upset and I said well you the blame for that, you know he is an idiot and you keep signing listings so he can continue to be one. I don't care if you ever reduce your price, you two are just helping my listing sell, after getting the price on your place, my listings look like we are giving them away. You don't like what the agents tell you, you don't like what the buyers are telling you when you don't get any offers at all, and if you did get a sucker to pay anywhere close to your price, the bank is smart enough not to loan that much money on that house, so you will need a sucker that just won the lottery and isn't to bright.If you guys are really serious get your information from the same source as the bank uses, get a formal appraisal. They get paid the same amount whether their research shows you home is worth ten bucks or a million so have no motive not to give you a fair price, call one.

I felt a little bad about my lack of tact so I went back to the office and printed out what buyers could get for the price they were asking and dropped it off and said drive by these and compare them to yours, and then call a broker that won't fold when you demand they list at your dream or wish price. list it at the price the appraiser came up with and make copies to give to buyers looking at the property. I about fell off my chair when a month later they called and said come list it, I was expecting an some old lady to drop by with a basket of poisoned apples, too many Disney films I guess..

Sep 27, 2013 01:06 AM #39
Rainmaker
472,340
Brenda Mayette
Miranda Real Estate Group, Inc. - Glenville, NY
Getting results w/ knowledge & know-how!

AMEN!!! Fantastic topic... especially this week in my world.  It's funny that sellers are afraid of pricing a home too low but not more afraid of pricing it too high.  If a home is priced too low (when really does that EVER happen??), the market will respond with multiple offers that drive the price up.  And overpricing just causes a precious loss of market time.  I'm done with agreeing to those few weeks where we "Just make sure".....!

Sep 27, 2013 04:16 AM #40
Rainmaker
454,618
Kim Boekholder Utah Real Estate
Results Real Estate 801.580.5624 - Draper, UT
Broker, Results Real Estate

Overpriced listings are a nightmare. Everyone ends up miserable.  The truth is what the seller needs to hear.  They may not choose you as the listing agent because others will promise the moon, but in the end you will know that you were honest with them.  Some people will say anything to get a listing.  Its sad. 

Sep 27, 2013 06:00 AM #41
Rainmaker
1,417,657
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

There will always be an agent who will list at whatever price the seller wants to list at... eventually they learn to pick and choose their work load as well!

Sep 27, 2013 06:08 AM #42
Rainmaker
904,118
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

Mike, how right you are.  I truly think some brokerages are all about market share.  Let them wallow in their thinking and unsold listings.  Some for sale signs start growing roots..  After a while, any agent worth their salt knows which agents/brokerages do this.  What I don't like is when it reflects bad upon the whole Realtor community, and gives us a black eye.  

Sep 27, 2013 06:30 AM #43
Rainmaker
429,567
Kelly Young
The Platinum Group Realtors - Colorado Springs, CO
Colorado Springs Real Estate ~ 719-226-0126

Mike, true, true, true. And who ends up getting hurt in the process both financially from taking an overpriced listing to people potentially talking about why you "the lisitng agent" did not get it sold.

Sep 27, 2013 12:41 PM #44
Rainer
210,791
Jack O'Neal
Conway Real Estate - Gilbert, AZ

Good topic, I do not understand wht agents take over priced listings, it affects your DOM, I use realistic prices for my homes and thet sell.

Sep 29, 2013 12:43 AM #45
Rainer
275,191
Raymond Denton
Resolute Federal Savings Bank - Irvine, CA

Overpriced listings are wonderful when they're located near the entry of a community.  I'd meet a lot of new clients, holding open houses as often as possible.

Sep 29, 2013 03:43 AM #46
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Rainmaker
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Mike Cooper

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