I'm not really familiar with your market Jim but I have a client that contacted me about relocation. They stated their home has been on the market over a year.  I asked what did their Realtor tell them and they said they were told the market is in a "hopeless downward spiral."  I think what I suspected may be true....hopefully that's enough said!

Jim,

As always you are a beacon of truth.  I call these unrealistic sellers.  They either need to get in line or get out.

Jim, Leave it to you to post another brilliant bit of information! I showed a starter home last week that was $9 per square foot higher than any that have sold in the last six months. He could NOT negotiate, and "needed" his asking price. I told his agent that my buyer could not make an offer with those terms and I was not willing to let my buyer lose their appraisal money, knowing full well it would not appraise!  She then tried telling me all of the reasons why it "might", including her CMA of ONE house a year ago. (Large neighborhood, with 36 closed in the past 6 months at or below $86 per sq. foot, hers is listed at $95). WHAT?  I asked her why she thought it was worth last years price in the declining market. She couldn't answer me, lol.  Needless to say, my buyer took my advice!

Huntsville Alabama Real Estate Agent, Kimberly Grant (Exit Leon Crawford Realty)  That is funny, I just closed on three listings.  We sold 2 of them in record time, and had multiple offers.  We have another under contract to close at the end of the month.  It was on the market with another agent for over 2 years.  We sold it in about 6 months, and the seller.  We briefed the seller of the current market conditions and he worked with us as a willing partner.

Adam Brett - Fullerton, California Realtor (RE/MAX NOC)  Yes, but the sellers are enabled by foolish agents.

Huntsville, Alabama Real Estate Agent Elizabeth Ramsey Cooper (Remax Huntsville/Madison)  Buyers need to listen to the voice of experience!  Thank God they have you in their court!

Jim I've been saying that overpriced listings are worse than short sales.  At least with a short sale you have a motivated seller.  The bank may be a difficult to work with but at least they do eventually get around to responding.  An overpriced listing just sits and sits.  No motivation on the part of the seller and I still don't get what the agents get out of having grass growing around their sign!

And the beat goes on.

I just looked at Montgomery County and the listings for last April were 4561 and for April 2008 there are 6583.  The dollar amount is holding but the number of sales goes down by 25% and the number of listings goes up by as much.

They're all happy as long as the price holds.  It's insane.  One day we'll wake up and there'll be 25 homes sold in the State of Maryland for a month but that's O.K. as long as the average price holds.

And the beat goes on.

Some agents will be happy just to have a sign in the yard to attract buyers.

Jim, I think you ghit the nail on the head when you said professional listing agent, most of them wouldnt know it if it hit them in the face.

Jim - You are absolutely right! I should show your list to the agents that I am dealing with :)

Cindy Jones-Offering Real Estate Service for the 21st Century in Northern VA (RE/MAX Allegiance #1 RE/MAX Company in the World)  Clueless agents and sellers.  I will not even waste my time and show overpriced listings.

Lenn Harley, Homefinders.com, MD & VA Real Estate  Lenn you are so right.  I recently saw several overpriced listings in Atlanta move from 899K (Which was way overpriced) after threee years, and now...TADA 499K as foreclosures.  If they were really bright, they would have unloaded a few years ago at $649K.  Greed is a total loser...they were never worth in the 800K's!

Karen Luke --- Stockbridge -- McDonough Real Estate (Keller Williams Realty )  That is what I just do not get!  The sign I want to see in the yard is "UNDER CONTRACT" and "SOLD!"

BART WHITMORE REAL ESTATE CONSULTANT (THE REALTY MARKETPLACE)  I agree.  There are very few agents that I regard as a professional!

Maria Mastrolonardo - Naperville Illinois Real Estate (RE/MAX of Naperville)  I also think some of these agents have such BIG egos that it wouldn't matter to them anyway!

Well said Jim and these temporary agents are in every market.  We have had nearly 10,000 of them come into the business in Texas since 2000.  And nearly that many will bail in the next 2-3 years I predict.  They cause turmoil in the market and make things look worse than they really are by not knowing how to price and work with sellers intellegently.  The good news is that most will be gone by 2010.

Jim,

If an overpriced home does somehow get a contract, an experienced mortgage lender involved in the transaction will see right away that it isn't going to fly. The appraisal, especially in today's environment, will stall it. Being market realist goes a long way. 

Jim: Great points... to may people think the sky is falling and it really isn't. Here is Clarksville our market can best be described as GOOD but QUIET

Steve Homer (The HBH Group (Keller Williams affiliate))  The sooner they leave the better, and the sooner them markets will come back to normal.  We have to have guts to tell sellers the truth.  It does not matter what homes sold for last year, it matters what they are selling for in the last 3 months or less.  This is where we separate the children from the grown ups.  Are they afraid to tell the sellers the truth?  Does the cat have their tongue?

Esko Kiuru - Las Vegas NV Mortgage Consultant (Sinifox Financial)   An experienced agent can be right on the money with pricing!  Any agent that cannot figure out how to price a home correctly should really leave the business. 

Roland Woodworth "Ft. Campbell Area Realtor" (Exit Realty Clarksville)  There probably are a lot of really good markets.  The numbers are skewed incorrectly by inexperienced agents that do not have a clue, or the courage to tell the owners the truth.  The result is a lot of homes grossly overpriced sitting, and then reducing it to where it should be all along.  The press catches on to this piece of the puzzle and run with the stories of price collapses!  Someone should slap some sense into their brokers for allowing this to happen.  They make the real estate industry look like a bunch of idiots.

Jim, it doesn't get much better than this.  The words of an experienced agent can help a seller move their property in a very competitive market.

Ray Nellum, Fort Smith Real Estate (Ramona Roberts Realtors)   I really think that it isn't easy being a professional, but that is why folks want to hire us.  If a seller needs a lacky, hire the agent that just got their license.

I agree with my brother Ray Nellum. If some real estate agents feel that some home sellers are pressuring them to list their house over market value ( It happens a lot ),they should just walk away from the listing. I would rather walk away from a overprice listing than risk my reputation as a real estate professional -It is not worth it. Great post.

How is this for concise:  AMEN!

Lanre Folayan "Buy a home in Washington,DC" (EXIT PREMIER REALTY)   Walk away is a smart strategy.  Comeback in 9 months when the seller recontacts you.

Steve Shatsky - Dallas Short Sale Specialist (Keller Williams Realty-Dallas City Center)   It is as concise as can be!  LOL!

Jim, just because an agent is new does not mean they cannot price a home correctly. While it may not be the norm there are those out there that have it together from the start. Just my 2cents.

We all hear every day... get listings, get listings... for when the market turns.  We have so much inventory here in WNC (like you) that each day that goes by, the more ammunition is available to educate the sellers, and hopefully help them be more realistic in their pricing over the next few months.  In the meantime, I'm concentrating on my marketing, business plan, and blogging ma

rket reports on my main blogging website.

Jim,

Amen...I walked ut of a listing last week...I told them I'm not taking it...too over priced and don't have enough money to support their property that won't be getting any calls at that price...I think they are going to take my advice....we shall see.

Jim...

I never really thought of pricing being related to inexperience agents but you're dead on target with this one. How many listing presentations have we done with appropriate pricing, only to see some newbie agent get the listing at a 20% higher price that we knew the property was worth? And somehow, this is supposed to be helping the seller? Great post.

Colleen MacDonald (Beasley Realty)  Most can't.  88000 listings on the market in Atlanta, and most will never sell.  I can look up the statistics of just about any agent and broker, and can easily defend my statement.  The incorrect pricing is so pervasive it is beyond scary.  Experienced agents would not waste a moment of their time taking an overpriced listing in this market.  It is a total waste of everyones time.

Susie Blackmon NC Realtor, Maggie Valley, Waynesville (COLDWELL BANKER)  Listings are not where it is at.  Buyers are in this market.  Signs are not making the phone ring, gas is too expensive for floks to be driving around.

Neal Bloom-Realtor ® Assoc.-CRS-Weston FL (RE/MAX Premier Associates)  I've turned down a lot this year, and the overpriced ones are all still setting.  The ones thata I listed other than Condos, I've either sold them or they are under contract.  I have two single family detatched homes left.

Richard Weisser, Broker, Auctioneer, CE Instructor, E-Pro, ERA United Realty (Coweta Fayette Real Estate, Inc. ERA United Realty)  It's called, "Buying the listing!"  Once a high price is confirmed the seller will not interview anyone else.  A few weeks later the listing agent starts to hammer the seller to reduce price.  I very seldom if ever ask my sellers to reduce their price once they've listed with me.  I will only ask for a reduction if I see deterioration in the market.

Putting a sign in front of a home that you know won't sell is a complete waste of time!  Very well said Jim.  You are right, inexperienced agents are contributing to this mess and it becomes a vicious cycle:  homes priced incorrectly do not sell and lead to higher home inventory.

Jim, this is SOOO true. I went to a seminar and a guy asked Brian Bailey how do I get this guy to sell his house with me? it was a million dollar property but it's worth maybe 900k. How do I get him to sign on the dotted line? Brian said YOU DON'T, you go to your next listing appointment. That is SOOO true, life goes on and you have to move on to the next one. I wish the properties were cheaper here but I know they are priced to be paid off and hopefully the seller will be walking away with money instead of bringing money to the table. yes, they are priced wrong and people need to look at the actual market, as to seeing what it is worth, not here's a number!

On the flip side, the other type of pricing it wrong is the underpricing where the seller would receive a frenzy of showings and multiple offers.  Either way, it makes a buyer's agent's job extremely difficult and we have no harmony in this market.  Lots of wrong pricing!

  Hmmmm....Here they are often overpriced by very experienced agents...it's called "buying a listing"....they know it when they do it...and do it and do it....and collect a bunch of listings that sellers will find out that they "fall out" over time....and some go to discount agents, decide to FSBO and all and all the "experienced agents" give people selling their homes a very bad experience and a rotten impression of our professsion !

Great Post.  I lost a listing too because they didn't like the price. 

It is hard to get even some veteran agents to see this basic principle. I have told people that it is not location, location, location, it is price, price, price. The worst dog on the street will sell if it is priced correctly based on condition, advertising, location, etc. The most wonderful palace will languish if it is priced too high. I have no time to waste on greedy or uninformed sellers. Those that listen to reason will sell and do well.

I wonder why more brokers don't educate the more experienced agents or agents who haven't been in this market before.  It doesn't seem to serve anyone well.  I am still seeing a lot of homes that are not priced well -- and this always seems to be the case when an agent wants to sell their own home! (lol). 

So many agents will take on anything.  They get their sign in the yard and brag about it.  When it doesn't sell, they are on to the next thing.  They act like no one noticed.

What I'm finding interesting in the Atlanta market is how the sale price/listing price average has dropped from about .95 to around .91 in the last few months.  People are not dropping their prices but they are accepting more aggressive offers.  I'm wondering if they are not dropping their prices on purpose because they know they are going to have to accept 90 cents on the dollar in the end. As a buyer, knowing that average ratio, you know I'm going to be asking (and expecting to get) at least that kind of a deal when I'm ready to make my offers. If someone doesn't bite, I'll move on to the next possibility.  With inventory this high, someone will be interested.

Jim - You are absolutely right!  I just turned down a listing today that wanted to price $100,000 or 25% over market. 

Aloha Jim,

We see the same situation here in Hawaii; lots of poorly priced inventory just sitting on the market.  Here's one example that is going on right now in my neighborhood: We have one home priced a little over it's tax assessed value, three doors down it's one hundred thousand over, a bit further down the street a property is in foreclosure and is priced several hundred thousand under. Needless to say if the foreclosed property had priced it right the first second and third time around they probably wouldn't be in foreclosure. With the foreclosure swamping the comps you create a fine mess with the other sellers. The foreclosed property was in disrepair (total dump) when it went on the market six months ago with an initial asking price several thousand above the tax assessed value. Unfortunately, a broker listed the property complying to the owners demands and as a result the consequences are far reaching, affecting all the other sellers and brokers in the neighborhood. Reducing on paper the value of real estate in the area at least until there are higher comps.

Our market is beginning to creep upwards again, the only downside is the mortgage mess that keeps buyers at bay. Thanks for your post.

Peace,

I find it interesting that we all look to blame. The truth is the market is not awful and buyers are available. The value of a home is what a buyer is willing to pay...and what the seller is willing to accept. I must admit I am amazed at prices like $351250....a price like that probably reduces your showings by 30%.

Colorado Springs Realty Patricia Beck (Prudential Professional Realtors, GRI)  The overpriced homes and the large number of them are counterproductive, and may scare off buyers.

Jennifer Butz (Georgia Lending Partners, LLC)  Jennifer you are so right, "NEXT!"  LOL!

Renee Burrows - Las Vegas NV Real Estate (Nevada Realty Solutions)  It is not about underpricing either.  It is having a property wiht no margin of error.  We just sold 2 homes and all we paid was closing costs...with full price offers.

Sally & David Hanson, Southeastern Wisconsin Realtors (First Weber Group)  The agents may have been around for a while, but they are not professional if they are buying listing. 

Rick Belben - Orlando Real Estate - Orlando Homes For Sale (Amerivest Realty of Central Florida)  I never look it as a loss if I do not get something on my terms.

Anonymous -  Price overcomes all objections!

Joan Whitebook, ABR, e-Pro, CEBA (Buyer's Option Realty Services)  LOL!  Physicians heal thyself!  Agents own homes are going into foreclosure in Atlanta at an alarming rate.  Obviously they do not understand the business we are in.

Karen Gentry>>Charlottesville, Virginia Real Estate Professional (RE/MAX Excellence-Charlottesville VA)  No sale = No Bragging rights!  It is really stupidity!

D.Smith  Historically, overpriced homes always bring in way below market.  My strategy s always to price at market for recent solds.

Debbie Summers, Licensed Real Estate Professional (RE/MAX Central Realty Lake Mary, FL)  It is a great feeling to say "No!"  Walking away has to be the freeist feeling in the world that you are comfortable wiht your decision as a professional and stand by it.

Kimo Stowell (JDS Consulting Staging & Interiors)  Foreclosures will really drag on all surrounding prices.

Team DiMuria, Katy Texas Realtors (Prudential Gary Greene Realtors)  What a buyer is willing to pay and a seller is willing to accept is fine as long as you are doing a cash deal.  If you are financing it needs to pass appraisal.  If it doesn't appraise you can lose several months of work.  The buyer's agent can lose the buyer that is left wiht a sour taste in their mouth, and the listing agent kind of gets what they deserve by not firming up the right price on the front side.  This is a market where even the right prices are not appraising.

Jim, I'm sure you are right about over priced homes selling for way below market.  Once they sit around for a while getting stale at that inflated price, all the buyers begin to wonder what is wrong with them.  I would think, in these times, with prices seeing downward pressure, if someone was really needing to sell their house, you would price it just a tad UNDER what those comps from the last three months indicate.  The market has changed, even from three months ago.

This is the strategy I used when selling my FSBO home in February. (Yes, I'm one of those dreaded FSBOs). Comps suggested $725k, but some were old and I knew the market was changing. We set the price at $699k and sold it for $689k in six weeks. When we are not in a stable market shouldn't we be anticipating the trend, one way or the other? I'm sure it would be much easier to sell the seller on this strategy when the prices are going UP rather than down.

I think your blog is very interesting and informative.

D. Smith  I recently sold my own home exactly the way you shared.  A year before I could have sold it for a 100K higher.  I was not in a position to sell the home a year before, and placed the home on the market and sold it within 5 days without another real estate agent involved.  I did pay over 8K in buyers closing costs...it was part of doing the deal.  I sold my home via a Blog on ActiveRain.  I think some folks get greedy, and perhaps they are just in denial of the facts.   You are a very smart home seller.

Jim, that is definitely true. It doesn't help to have these homes listed when the sellers aren't serious about selling.

That's so well said! From my experiences as a home stager, I see a lot of great homes' golden marketing time go stale because they were not priced to sell. seller end up losing more.

Christy Powers - Pooler, Savannah Real Estate Agent (Keller Williams Coastal Area Partners)  It would do everyone a favor if they took it off the market.

Cindy Lin @ Staged4more, ASPM, IAHSP, IRIS (Staged4more Home Staging & Redesigns)   It is a fact...that many agents and sellers do not seem to know.

I'm seeing a lot of listings that will not sell at the price they are asking until my 4 year old is in the market.  Oddly, there are a lot of "listing powerhouses" that don't seem to understand that this isn't the peak of a seller's market.  Of course, it doesn't help thet there are still some banks that think that crap houses needing $30k in renovation are worth the same as other homes in the S/D that need nothing... 

6. Is willing to have their home properly prepared for the market and then keep it that way until sold.

Lane Bailey - The REALTOR for Car People (Century 21 Network Realty) LOL!  I love the one about your son, but you are right on the money!  In my old subdivision, I had one of the most expensive homes and now I see that homes that were priced almost 300K less in base price are listing at over 150K more than my old home.  That is an incredible spread for a home with no extras or better yet an EIFS home.

Kathleen Lordbock (Re$ale Design) ~Minnesota Home Stager~ (Re$ale Design & Home Staging)  Amen!  Homes need to show well also!

If people are not going to be realistic about pricing then they simply should not be trying to sell. It only clutters up the market. Our 2 cents.

Jim,

I have done many appraisals where the Realtor left a lot of money on the table.  I also, have done many where the Realtor were too high.  Likewise, some have come close to the apprised value.

My opinion is, before a home is put on the market a professional appraisal should be done because most CMA's often fall short.  Get a third party professional appraisers opinion of value and this will eliminate the pricing problem with the seller.

Make sure the appraiser knows the market and can produce a credible report.

Bob & Carolin Benjamin - E Phoenix Arizona Real Estate (The Benjamin Team - Keller Williams Integrity First Realty )  I agree fully, it does clutter up the market, and also dashes expectations for all.

Russell Bean (Bean Consultants & Assoc.)  I've not seen many where the agent has left a lot on the table for the last few years.  What I mostly come across is way over priced homes.  I also totally agree with you about the appraisals.  I recommend they get a market appaisals all the time.  However, most folks are too cheap to spend the money.

I couldn't agree more Jim. I do think that for some agents it is a race to see who can carry more listings regaurdless if they are taking over priced ones.

Jim, as always, great advice. 

 Kristy Taylor (ERA CAM Realty Group)  It isn't a contast.  It is a most difficult market even if you have done everything right!

This is good stuff; you're absolutely right. An over-priced home is not for sale at all; it is nothing more than an open gallery.

Stephen Graham (Associate Broker) Buyer's Agent (Realty Professionals, Inc. - Atlanta, GA Georgia) The only thing worse is to be the listing agent.

ok mr. crawford. while i do agree about the pricing of the homes, it really bugs me when realtors start talking about experience. while i do not consider myself i newbie anymore, when i first started selling, i listed. and what did i list? i listed expired listings. why did those listings expire? because the "experienced" agent who listed it before me "priced it wrong" what did i do? i priced them right and they sold. i have had clients who did not list with me because i didn't "buy the listing". they listed with other "experienced agents", their listing expired and i went back and listed for the price i suggested originally and sold. so i wouldn't say it is the inexperienced agents who price wrong, i'd say it's the agent who lacks professionalism. i'd say it's the agent who lists on a wing and a prayer that they will get the price lowered and the listing will sell (this agent can be experience or not so experienced). i'd say it's the agent who lists for the free advertisement of the  sign on the lawn. but i wouldn't just pin it on inexperienced agents. btw...what constitutes experience?