I agree

Midori having been in the business for twenty two years I could not agree with you more. Pricing a home properly is an art. It is probably one of the hardest things to teach agents but one of the most important.

Hello Midori,

Another great post......overpriced listings serve absolutely not purpose that I can see...........

You are so right when you say to pull uncooperative listings.  I have called three offices lately that they could not get us into the listing because the homeowner wouldn't let us in.  Let them go then 

I agree. Sometimes its painful but you have to cut your losses and move on.

Betty Knowles

Ditto, if people don't want to really sell, then take it off the market, the overpriced homes are not selling. The foreclosures are with multiple offers.

Midori,

So right...we discussed this how many times? I just had a lady call me two weeks ago...she knew me from the old neighborhood....she had here house under contract since July 2007...apparently it never closed. She found me on google because she moved and lost my number...I put the home on the market but told her where the price had to be or she would be wasting time....within 3 days we have a fully executed contract and was showing it 2-3 times a day. Thats what type of properties will sell. She agreed with me and is so happy she listened.

Thanks for the mandate--I have one right now that needs to be withdrawn. 

Hi Midori, Yep you're right. Withdraw those suckas.

I am surprised to read  "The reality...seller's aren't realistic in their prices still"  Personally I have found that sellers have been getting it for quite a while now.  If this is true then there are two reasons why a listing may not be priced right.

1. The sellers owe too much money and can only go so low.

2. The listing agent is not doing their job properly.

A lot of my sellers fall into the first category right now. You might want to do some research to make sure #2 is not happening. If it is then maybe a class on pricing and listing presentations is in store.

Just a thought. 

You are right. How about a marketing slogan - "Our brokerage will not list an overpriced house!" ...Nope, no one could do it!

How true Midori. Thankfully my sellers are pretty realistic and understand the market...but if they didn't- I would walk away. You'll only ultimately disappoint them if you don't and no matter what they will blame you when it does not sell.

Midori, you are absolutely right. We forget that this is a business and overpriced listings do not help our bottom line. Additionally, it is our fiduciary responsibility to the sellers to price the property right so that it will sell. If sellers aren't realistic in their pricing, it will only hurt them in the long run. If sellers are in a position where they owe too much money and can only go so low as mentioned above, it's time to look at alternatives to selling. WSe don't help our sellers or ourselves in taking overpriced listings.

Great Post!

Midori:  Thanks for your words of wisdom.  It helps us as real estate agents to reflect and think about our past and current listings.  I'm thinking of two in particular.  I listed one last year, got a great offer and the seller turned the offer down.  The home is still on the market, but not with me because I withdrew my listing after that.  Another one is current, priced right, but not selling.  The primary reason is that it has a lot of steps entering into the home.  That leaves a great percentage of people who will not even look at it.  What to do?  

So at a listing presentation the other day, my partner and I had gone over our price and the seller said it wasn't enough he needed x+2. My partner stopped him in mid sentence and said" not to be disrespectful but the market does not care a whit for what you need or want. This is what your home will sell for. You need to remember you can't set the market, we don't set the market either...it is what it is". We got the listing at $15,000 under what the seller wanted... got an offer on day 7.

Also it was alluded to that there were no price discussions (to reduce price). All too often the listing agent takes the listing and for all intents and purposes drops out of sight. Sellers are clients too and deserve to be contacted...frequently (at least once a week) even if only to say..sorry things are really slow. IF you contact your client weekly you will find that the discussion about price reduction is much, much easier and usually will go your way too. But to list and disappear for six weeks then come back on a phone call with..."well you need to drop your price $20K... be ready to get ignored or at least take some heat.

Midori - I hope you are inferring that we fire the client. I have withdrawn for holidays, etc. I fire people that don't want to sell. I fire people that want to sell but refuse to accept what the market will offer. I tried to fire the counter boy at Jerrys for taking too long getting my meatball and cheese sandwich. I didn't have the fiduciary relationship there. We tolerate many things. We should not tolerate a relationship that is not working. Achieving a goal, using a unified approach is our job. If the client does not buy into that theory, fire them (and then hire a coach or therapist and explain to them how you got into the relationship in the first place.)

Midori - So right on!  I can generally get a feel how realistic a seller is at the get-go so I don't run across this much as I just won't take the listing in the first place if I feel we are going to hit road-blocks.  I feel for agents that are struggling with this concept right now and they really need to learn to turn the corner on this.  

Hi Midori,

This is still a huge problem, but if agents were doing their job in the beginning there wouldn't be sooo many unsaleable listings hanging around.

Every word is true.  Every word is good advice.  Every word is important.  I flagged this.  It MUST be featured. 

Unfortunately, the dynamics of why agents take overpriced listings will drive the inventory of homes that sit and sit and sit.  Bryant Tutas mentions those reasons in his market.  They are not the reasons in my market. 

In my market, the majority of home owners who contact me about selling, purchased their home in 2005-2006 with all intentions of selling it in 2007-2008.  Here we are and their house isn't worth what they paid for it and they want out. 

• Agents take the listings to get their name on the board.
• Agents take the listings when they let the seller dictate the price. 
• Agents take the listings to satisfy the brokers quest for market share.
• Agents take the listing because they simply don't know any better.

BTW, agents taking overpriced listings is NOT a new phenomenon.  It's been happening since I can remember.  What is different now is that the seller often cannot list for less because they owe the list price.  Back in the 1980s and early 1090s when a LOT of sellers brought a check to the settlement table, folks had a fairly reasonable cost of living and savings.  I believe that gasoline was about 95 cents a gallon in 1989.

In fact, sellers overpriced their home to sell was one of the driving forces for me to buyer's agency.  It appeared that I was going to be in an adversarial relationship with sellers who

• "I want $XXX out of my house."
• "I'm not giving my house away."
• "I don't want a lock box".
• "My dog is very friendly".

One thing a good listing agent must have is market knowledge to maintain their professional integrity and a lot of patience.  I have none of the latter. 

I greatly admire and appreciate listing agents who bring good houses to market so we can sell them.

Somehow, people still hold on to the old saying, "what sells a house is Location, Location, Location."  The truth is, what sells a house is Price, Price, Price."

If it Ain't priced right - it Ain't sellin!!  (excuse the improper grammar.)

If the house is in a great location, but it's overpriced - it won't sell!
If the neighborhood is lacking, but the price takes that into account - it will sell!

The same holds true for all the other variables:  Great property - overpriced - no sale!  House is a mess - priced correctly - sale!  Whatever the condition, for the right price, it will sell.

Great post and excellent comments. In our market the sellers are still asking way too much for many of the current listed properties. Our market has not been hit as bad as your market and others in the country so our sellers are a few months behind in getting with it. I have had to walk away from a couple of listing and it really is difficult for me to do that. Yet, when I read good advice like yours I am glad that I did.

Best,

Scott 

Midori- Aren't you glad to see that our inventory is finally dropping though? It has been a slow, steady fall, for several months now. But I'm just hoping it's the sellers who aren't really serious, finally taking their properties off the market, and not a bunch of foreclosures that will eventually come back on the market!

Hi Everyone thanks for the comments...yes I do think its time we take back our industry...its time to just walk aways sometimes! 

Bryant-there is a house around the corner from me that has been on the market for almost 2 years..I think I even wrote a post...same thing...expires..relists...same price..6 months..new agent...the new price for 2008...a massive reduction...60,000.00 and still overpriced!

Lenn-You are right this isn't the first of overpriced listings..its just now...buyers can't make up their minds because they want to see everything that is available...just imagine how much easier the jobs of agents would be if they could just get to the good stuff....priced right...quality...and saleable listings.  Its kinda like e-mail and spam except the overpriced unsaleable uncooperative seller is the e-mail and the property spam..spam...spam! 

Lisa-Yes I am thrilled inventory is less but not little enough...then number of agents need to dwindle down as well.  Believe me its sad but the truth is the pro's need a shot...so do the sellers who need to sell and buyers who want to buy!  We need declines in the number of agents and listings...and less declining prices!  Imagine how much easier your job with a buyer would be if these so called wannabe sales weren't there!

There is another house on the corner from me...auctioned...and auctioned..and listed again.  I say get serious about the price...and maybe they may have a shot of selling. 

amen sister.... spread the word please..    I'll give some agents over here to contact

Hi Midori, love this post as it is right on.  We have quite a few overpriced listings here in WNC, and our sales are down/inventory increasing.  Where are all the FL buyers!?

Midori...I agree...having an overpriced listing makes no sense at all.

Some sellers or listings are just worth having, like you say someone will take them.

Ditto..............And Double Ditto Ditto

Midori, I confess, i have one of these listings.  I had an offer on the home, seller wouldn't take it and now he is listed for the price I had the contract for!  I don't know what my problem is?  I don't usually put up with such things.  He is not demanding, I asked him if he wanted out of the listing, he was free to go.  He said no, I only want you?  Maybe he just likes having the house on the market?  I need to get a grip!

Midori,

All good points.  It is so hard sometimes to think about withdraw when you have worked so hard to secure the listing and wanting to get paid on the hours already vested.  But at that crucial point, you need to ask yourself, how much more do you really want to go into the black.  It's like Kenny Roger's song, the Gambler:

You gotta know when to hold

Know when to fold 'em

Know when to walk away and know when to run 

Midori, if only more of your colleagues adhered to your suggestions!  I've always been amazed at my Realtor partners that took overpriced listings or continued working with an unrealistic buyer or seller.

Now I need to write a post like yours for lenders:-

1. Don't tell the client how much they need to make in order to qualify and then put them on a Fast N Easy loan at Countrywide.  Of course the Stated loans are almost extinct at this point.
2. Don't provide false quotes when a client is rate shopping on the phone - even though you know you don't have to honor what you just told them.
3. Don't tell the Realtor "everything's fine!" when you know the file is jacked up - it just erodes what little confidence they have in the rest of us.
4. Don't tell the client the rate is locked and then make them pay when the market moves the wrong direction and you neglected to lock them in.
5. Don't tell a borrower it's ok to refinance their home loan with an owner occupied loan when you know darn well they intend on renting the home out and purchasing another just as soon as the loan closes.
6. Etc...

yes, this post still has legs,,,and the wierdest stuff around the outside of the post..thought I had been hijacked to a better place for a moment..

I took an hour this morning to look up all the listings I had before...out of nearly 25 deals, they are all on the market but one......and it was withdrawn.......I rest my case...

Thats too bad when agents hold listings forever.  Another thing is to get the seller to committ to you in the beginning to do certain things.   Your job is....my job is. Than when you call them you say...okay, Ive done my job I have a seller...now its your turn....this buyer wants to see the property such and such.  Proactive committment for them sellers!