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I Didn’t Get the Job

I went on a listing presentation this week and I didn’t get the job. I am a competitive person and I don’t really like to loose out to another agent. However, character and integrity are all I really have. I will not lie to people. I will not tell them what they want to hear just so they like me and I get their business. It is a tough market out there and we all need to be realistic on pricing.

Going in, I knew that they paid more for the home than it is currently worth. I presented 3 comparable properties; all were of similar size, age, construction and location. They all closed within the last 6 months. The comparable homes sold for $480,000, $495,000 and $545,000. The one that sold for $480,000 was the closest in terms of condition and updates. The home that sold for $495,000 had an updated kitchen and updated appliances. The larger home for $545,000 had a top of the line gourmet kitchen and updated baths. I told the sellers that they needed to price their home closer to the first two, maybe starting out at $499,900 or $509,000. If they want to sell in a reasonable amount of time, they need to get the pricing right the first time, or they will linger on the market. There is about 14 months of inventory on the market in their price range.

The next day I received and email from the seller asking: “Do you have any other comps that you considered in addition to the 3 presented?”

This was my reply: “I could pull other listings and make the numbers say anything you would like, numbers are easily manipulated. However, a higher listing price will limit the number of showings and prolong the listing time. Even if we do get a buyer to write a contract, the banks will use these three sales to determine the assessed value. If that number is less than what the buyer said they will pay, there is a good chance the buyer won't get the mortgage anyway.”

Well, the other agent they called in pulled three “comparable” properties and somehow came up with a list price of $650,000. Wow, that means one of us is off by more $150,000. That is a lot of money. Needless to say, they went with the agent who told them their house was worth way more than it actually is.

Am I upset I didn’t get the listing? No. I can’t sell a house that in my opinion is listed so far above what other homes in the neighborhood have sold for. I wish these sellers and their agent all the best. Who knows, maybe I will get to be their second agent.

Posted by Sherry Spengel | Wheaton IL on 01/19/2009 05:14 PM

Comments (95)

Overpricing in the Home Selling Channel

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95 Comments on I Didn’t Get the Job

JAN

Good for you. These same people would be calling you every five minutes wanting to know why they don't get any activity on their house.

Good for you! These overpriced listings simply LANGUISH for months. I have a friend who kept his list price on his home TOO HIGH and even rejected a very good offer - erroneously thinking that Sellers were in charge. Today he would be lucky to get half the price he turned down.

You handled this perfectly. As Silvia said, the seller would call you constantly and when the house didn't sell for the list price you would be blamed. This same thing happened to me last year. The sellers called me three weeks later and told me they made a huge mistake. I didn't budge on my numbers and the house sold in two weeks. They think I am a genus! Guess what, I felt like one too!

Good for you, Sherry. Integrity always prevails, in my opinion. I think some prospective clients do not like honesty... only what they want to hear. I think you will get to be their second agent. :)

Being the 2nd agent to take on a listing is a GREAT feeling! Be patient and wait for it to come back to you.

you did a lot of research and you will probably get the listing the 2nd time it is listed, unless pride gets in the way of the sellers

Yep it usually comes back around to you the 2nd time around after they have "fired" their other agent because nothing was happening on the home. It's amazing how sellers just don't want to believe what the facts are.... but honesty and integrity is always the way to go. Good business decisions on our part as well. And quite possibly you may not want the listing when he comes back around to you! Good luck - good post.

I agree with you! I have had my share of difficult listings. I try to stand my ground and give them my opinion and experience. I cannot tell them what they want to hear, if it's not true.

Sherry, I was on that listing appointment this afternoon! The prices were lower but the scene was the same. I don't know yet what they're going to do but it is terribly frustrating.

Good for you. Do not take an overpriced listing because all you will be doing is marketing a property that will NOT sell for the asking price or probably anything close to it. Move on and dust off your shoulders....there are tons of new opportunities everyday! All the best.

I'll be so glad when more listing agents will realize that you can't make a silk house out of a pig's outhouse. Or something.

Unfortunately, so many home owners that would be sellers are suffering from negative equity and have no way of selling at market even if they would listen to the facts.

I "lost" a listing last summer, but called them with a buyer before they listed... and SOLD the house as the buyers' agent. They were unrepresented, but now they are GREAT references for me!

Like you said, maybe you will be second. Sometimes it just takes time for sellers to realize "reality". Good luck on your next listing appointment. Hopefully your seller will be more "realistic".

Wow, that's quite the price difference isn't it? Amazing that agents allow themselves to be manipulated into situations where they are willing to buy a listing. If the seller doesn't get more realiastic, it looks like you could be their 3rd or 4th agent by the time they get "real". Good luck and good for you! Being honest is sooooooooooo important in this business.

Sherry, it sounds like that house will not be selling, so you may very well have your chance! I know exactly how you feel, and, as disappointing as it is to "lose", you're better off for now. When then happens to me I always watch like a hawk for those overpriced listings to expire...

You certainly did the right thing. I walked away from one last September when the sellers were unrealistic. They tried to say my comps were close to the main road and they weren't. They denied they had to compete w/the many new homes that were for sale in the neighborhood.

I told them they should rent and sell in another year. They went with the "nice" lady that listed the price $50k above its value. In the end they rented the home after it didn't sell. The other agent spent all that money and time and ended up w/a rental.

Thank you all for your kind comments. The good news is that I just saw the new lisitng on the MLS. It looks like the sellers are a little more realistic than the agent. It just went on the market for $574,900. It's still high, but at least a little more reasonable. Maybe I had something to do with that, who knows.

Dont waste your money or time on sellers who really aren't in the market to sell! One word of advice for you, NEXT!

When they get realistic, you'll get the listing back at the right price and sell it! It's frustrating especially in this market when you compete against not only agents willing to price or say what the seller wants to hear, but with false stats about themselves...we have a lot of that here...agents saying they sell more than anyone else, there are about 20 #1's in the same area...it's crazy. We too are building our reputation to last and are honest with each and every appointment and client...Thank you for sharing your story! We've all been there in some form or another.

Sherry, good job! I don't know what kind of service that agents who manipulate the numbers think that they can give a client that they have already set an unreasonable expectation with. What happens when the listing becomes stagnant or doesn't get shown at all? I believe that you're right, Character is the most important thing stock that we have in trade, and if you are inflating comparables to get listings or my favorite: "I have a buyer for your house," Whether you have a hundred buyers looking in that particular price range, until someone says that they love a particular house, you are being far less than honest if you're telling a seller that you have a buyer for that property.

Sherry, Sounds like a real professional answer. I'm sorry you didn't get the listing even though by your comment they went with a number closer to yours. Which means they should of went with you because you weren't there to list the home, You were there to sell the home too!

You didn't lose anything but you did save marketing money and their headache is not yours. Being the second agent is not always bad.

We all know that the house is not going to sell at that price! Silly sellers, when will they ever learn...

Wow, $474,000 looks like it's right in the ballpark. How did they get from $650,000 to that number before they hit the market?

$150K is a HUGE difference! Not sure why anyone would want to overprice to that extent.

Hi Brett - Sorry about the typo on my part - they listed for $574,900. It looks like they split the difference between $500 and $650. I still think it is too high for this market, but better than the original recommendation.

Maybe, if the house does sell at the higher price you can use it as comp for your other clients in that area.

You did right and You will be the next agent they call in 4 months when their house has not sold!

Honesly in my opinion the sale price of $480,000 if that is what the home was truly more like should have been discounted by 3-5% due to the declining market. There is no such thing as a "starting price" anymore. The only way to start is to go below the sold competion by 5-10% than get multiple offers in a bidding war. The start should be the bottom to work up, not the other way! Good for you!

Being the secong agent isn't always a bad thing! They have already been beat up by "low-ball" offers (in their mind) and are receptive to being told the truth.

Ugly thing is that now, because they've sat on the market for so long, and markets keeps adjusting, they will probably get even less now, than they would have, had they listened to you. Stay in touch with them, just to see how they are doing...it MAY pay off...

Much Success.

Amanda

Sherry, you did the right thing. Sadly, I believe alot of us have been in similiar situations.

Good for you! Let the other agent take the heat when the home doesn't sell because it's overpriced. They just might call you later on to list because they realized you were right on!

As others have said, good for you! It's unfortunate that sellers sometimes have difficulty accepting that their home might not be able to get as much as they thought, but in the end, they'll remember you as one who was willing to tell them the truth.

Your right Sherry, In listing a property unrealistically it is going to cost everyone involved. Number of open houses, marketing expenses, time on the market, sellers frustration and you having to continually adjust the sellers expectations. Consider how much of your commissions would be consumed by the time/money equation. It sounds like the sellers may be unrealistic regardless of the comps you provided. Like you said, you can "make the numbers say anything you like, they are easily manipulated". From a sales perspective, a couple of points in your experience stand out and if you covered them with your prospects, please dismiss my observations. I find it valuable to reply to important objections or requests over the phone rather than by email. Email offers no tone or inflection and can sometimes be missed understood by the recipient. If it takes time between emails to get the prospect their answer, it may be more difficult to overcome objections that could have been rapidly addressed over the phone. Perhaps the sellers wanted a bit more affirmation of your price point, another few comps may have increased their confidence and driven your reasonable price point home. The other point is to respond to their request with a question. "Are you asking for additional comps because you feel I have placed the value too low? or "If we find the additional comps in the area to be similar, are you ready to list and sell your home now?" If they respond yes to what ever question you come up with, generate the additional comps to provide the service requested and to further support your valuation. If they go with someone else because of price, you know you are remaining true to yourself and your profession. By asking the questions and providing the additional comps you have given them another opportunity to be realistic. If they are unrealistic and they are motivated to sell... the market has a great way of becoming the great equalizer. Best of success.

Bravo!!!

I was asked to list a property owned by an out of state Realtor, we decided on a listing price that was competitive in our market. Got the papers back she had increased the price 25% when I called her she said "I need to sell it for what I feel its worth" I declined taking the listing and was astonished a professional Real Estate Agent would say that when this is not her state or market...

Wow ! Sherry - this is probably an expired or withdrawn listing in 6 months or so... and probably the happy listing agent will not be happy or will be arm wrestling the seller for price reductions in the coming months. Comps are what they are... it is a tough market and I think agents that list properties that high just makes the market worse now the sellers neighbors will see that the property is listed for $650K and if they sell they might want to list for the same price ! It just confuses people... in any event, like you said, you might be the 2nd agent ! Or the 3rd : )

Hey, it happens. After it doesn't sell you have a good chance of them calling you back. It happened to be many times the last few years and I sold it. Keep us posted.

A listing is just baggage if it is over priced, and the grief the other agent is going to eventually get for the over priced listing, well he/she somewhat deserves it.

I too will not take over priced listings. I turned one down last week, they offered it to me but only if I would list at their price. I said no sorry there is no way it will sell, good luck.

I am just about to sign one for $1 million. But, 6 months ago, they went with an agent who said $1.5 million and that he had buyers. You guessed it: no buyers, and it didn't sell.

So, I'm now getting it at my price. Hopefully, you'll be the second agent too!

Brian Madigan

Way to go! Stuck to your guns! You hope the market doesn't fall further in the meantime with their home being over-priced. Where do you think the other agent came up with comps $150K higher?

Congratulations for standing your ground and not "buying a listing". Certain agents will overinflate a market price and then reduce reduce reduce! By then the sellers have lost time and a lot of times end up taking less money in the end! Or they expire and then will come back to you anyway!

Sherry, you did it by the book. The agent that accepted the listing will be asking them to mark it down in short order. It will also cost the new agent money and they will probably loose the listing. You can never go wrong when you put integrity first.

Who wants to market an overpriced listing in this market of competing with corporate sellers who are discounting just to dump inventory? Unless you have an endless pocketbook, you are money ahead. Or at least that's what the Hutchinson MN homes market is. Let that other agent market it for awhile and then the sellers will be realistic when they call you. Problem with that is it can become shop worn (if it does get showings!). Best to you in 2009!

Sounds like a listing appt I was on yesterday! They all want the same thing.....taking an overpriced listing in this market is a nightmare! I know, I learned the hard way!

Wow, you just saved yourself a bunch of time and money! Congratulations!

Being willing to say NO is an admirable gift...

It's not rocket science. If you have three comparables within the same neighborhood at near the same square footage with similar amenities you should be able to come close. Just curious. How are properties selling relative to tax assessments and what was their assessment? $150k is over 30% higher than your recommendation. Did you ask what comps the other agent is using. That kind of discrepancy is insane.

Sherry, thank you for sharing your experience. I'm headed for a listing appointment (my first) in a few days and after due dilligence and many hours of homework, I feel prepared and confident with what I think is the right price to sell. These numbers can be manipulated to look like whatever one wants to hear. Hopefully, seller will decide to work together with me. I'd love that! If not, then so be it. Either way, I'm more educated about their neighborhood than I was a month ago and that's what this biz is all about.

Maybe you can list it next year when they drop the price under where you would have started.

Sherry,

What a great quote by George M. Adams and it certainly holds true for your business ethics! It's unfortunate that this client could not see through to the truth, but was deceived by the amount they thought the house could sell for. As for not getting the job, you know that this only means something better is on it's way! You will be very successful in 2009 and the clients who understand the importance of your good character will be the ones who you wish to represent as well!

Sherry - Unfortunately people hear what they want to hear in spite of rational and logical reason.

Don't even spend any more time agonizing or thinking about this listing. Move on!

Good for you! It is an injustice to the sellers to overprice a property. Sounds like you did a good job of educating them about the current market conditions. In addition to overpricing being bad for a seller, it doesn't help you one bit either. Why compromise your standing as a knowledgeable REALTOR? Not to mention, time, effort, and money marketing a property that isn't going to sell.

Amazing! Even though we have been in this current type of market for all most two years and there is still sellers out here with a "pipe dream". Go ahead and let the other agent spend her money marketing a property way over priced. It's nice hearing that you stuck to your guns and yes you may be the second, third, fourth, or maybe fifth agent to handle this property and you didn't have to compromise your beliefs. GOOD FOR YOU!!

And you did get that little gold star!!

$150k ... wow! You have to walk away from listings that won't sell. It is perhaps the most important lesson we should have learned in the last 6 months (or more depending on your market).

We had a buyer a while back that was interested in a home. We couldn't find any comps to reflect the high price of the home. We asked the listing agent for the comps and were shocked when we got them. They were not even close. Needless to say, buyer decided on something else. ~Rita

Hey Sherry, You said quote, "However, character and integrity are all I really have.". I disagree with your statement about yourself. After reading your blog it's obvious that you have more than just those two qualities. You know your market, you provide the correct data, you are realistic about your services and about what the product is. You also know how the system works. Sometimes sellers and buyers don't understand the hurdles of a mortgage loan. You did the right thing. No question. If the house won't appraise out it's not gonna happen anyway. Not to mention that lack of traffic that listing will receive if over priced. Keep at it!

Well done. In this market you have to bloody your nuckles a bit on pricing so that they can actually sale the home. But some agents are still living in the unrealistic real estate boom where it didn't matter what the price...just go for the listing...throw it out there and someone will buy. Those days are gone....and soon too those agents.

Thanks for sharing

Right on Sherry. Do the right thing unfortunately the seller will lose out.

I absolutely think you did the right thing, I suspect you will have that listing sooner than later if the sellers are motivated at all. The icing on the cake would be to show that home to a potential buyer and hopefully sell it for what you KNOW it is worth. Good Luck!

Sherry,

I am a very new agent (1 month). I went on a listing to my neighbors house with the women that is mentoring me. The same exact thing happened. My mentor did not get the listing and the house sold for exactly what see said it would. The seller wanted to hear a higher number.

I thought that took a lot of integrity and I want to be that agent. We should all look up to you

Jim Treadway

I hope for them that they are able to sell their home at their dream price but Im afraid if you are right that won't be the case. Maybe you can help them if their first agent isn't able to get the sale done at their dream price.

I had just about the same experience with clients 18 months ago. They listed with the other realtor. The listing languished on the market. Our market slow down did not really hit until June of 2008. Then they started lowering the price. In the end they sold for $30,000 less than I suggested. I truly believe if they had listed it correctly it would have sold before the slow down and for more money than they got in the end. It doesn't matter how many years experience we have - they think they know better. Their house, their location is always better than anyone else.

Wow that is quite a big difference in comps! But that can definitely happen... you did the right thing in being honest. And maybe you will get a chance at it a little later on!!!

Sherry, I can see 10-20K but 150K?? With this market you may be the third realtor and that would probably be o.k.

Keep an eye on it (I am sue you will) and keep us posted - I will be interested to see how this plays out!

Kudos to you for standing your ground. It sounds like the other agent will likely be spinning their wheels on that one.

Sherry, I don't know who is crazier, the sellers or the listing agent. But they will both be losers for sure for not embracing the truth.

Ginger

Being truthful in pricing what the market is willing to pay is right on. I have taken clients who dictated price to me after giving them a range and they felt there home would sell for more. Well all it did was make them call every five minutes and tell me I wasn't doing my job there was no traffic coming to their beautiful over priced house that looked identical to all the other houses for sale cheaper in their wonderful neighborhood. nowadays I always put in my contracts either party can terminate this agreement with 48 hour written notice...I fired them it felt great. They hired a Realtor that promised more money,wine and cheese parties lots of open houses etc...they could not sell their overpriced home and canceled the listing and as far as I know are still unhappily living in their horribly ugly peice of I mean beautiful home.

Sherry..I won't be surprised if you get the listing a year from now!!

Have a great day!

Cindy

That really sucks...the only things i'm ok losing a listing over is price and commission. Good for you!

Sherry~ It sounds like they really wanted to list with you and even gave you another shot at it by coming up with another listing to increase the list price... you did the right thing and that is all that really matters!

Amen for walking away from the listing. It's always encouraging to see agents doing the right thing. I hope you get to be their second Realtor.

Sherry,

You did the right thing. Experienced agents don't want to baby sit a listing they want to sell it.

... lol ... keep tabs on that listing and watch it expire !

.... then try not to chuckle too hard

Way to show your integrity

Cheers !

Sheldon

Sherry, now if the other agent could sell it for $150,000 more that would be magic. Unfortunately the sellers took the bait. Live and learn FOR THEM. You were great.

When a potential client tells me another agent has said that their home is worth more than my cma I always say "Oh that's great and they intend on buying it." Usually the owner looks at me like i am out of my mind and have not been able to follow the conversation, they say "oh no Marybeth they told me the house was worth x amount of dollars more than you" and I tell them well then it really doesn't matter unless they are the buyers for your home because the majority of buyers will think your home is overpriced at the amount of money they quoted. At that moment in time, the lightbulb usually goes on, and the seller realizes what the other agent really said...........and I get the lisiting, not always, sometimes it does have to expire. Although in this market I have taken some listings and the original asking price may have been higher than i quoted to them in the cma, I tell them it is their money and I will try hard to get them the most money for their home and I hope they can prove me wrong, I would be happy with that..lots of times this makes it much easier to get a price reduction. Great comments Sherry, you go girl, best wishes for 2009.

Look at all the affirmation you're getting - and if you don't get the listing later, don't be surprised. I find sellers seldom run back to the person who told them the real price. Just smile when you drive by, knowing you told them the truth and saved thousands of $$$ on marketing and time. Next!

I really like Dawn's comment....true...think of the time and money saved on marketing to a listing that was doomed to fail....someone once told me, sometimes the best listings are those you don't get...

Lori Cofer Pullman WA

Just went through the same thing 2 weeks ago.. Great post thank you!!!

Sherry: All you can do is be honest with yourself and the home owner. Some times we don't get the listing.. Some times you get it in the long run.

JAN

Sherry -

I thought I was crazy! But by the volume of comments you received, this is very common.

This sort of thing gives the whole industry a black eye, unfortunately. Indeed, there is no shortage of other Realtors telling prospective clients what they want to hear. You seemed to get another "chance" - most of the time, we do not!

These days, however, even if the other agent fails to sell, your chance of a relist might be limited. The seller, unable to hit his inflated number, might elect to remove the house from the market eventually.

But at least you won't waste your hard earned marketing money and valuable time - yes?

DEAN & DEAN'S TEAM CHICAGO

Sherry - I wouldn't consider this scenario a loss. They other agent will not sell this property at that price. The Sellers made a bad decision. You can now use this property to demonstrate the value of other properties in your market to your buyer clients. Eventually the Sellers will realize that they were misled by the agent that listed their property. You may or may not want their business in the future but you can cross that bridge when you get to it.

Sherry, I think your post should serve as a reminder to us all that agent that "Buying Listings" are not the successful ones most of the time. I am sure you will get that call to list this home again real soon. Good call on your part! Take care and happy blogging!

How many times have we seen the very same? But, those are the properties that are still sitting unsold, long after they were listed. People that want, want, want and never get realistic on the actual value of their property will sit on it forever now (even though that is not what we want). I have seen this time and again. And, those are the one's that eventually will end up selling it for less than they could have gotten, or, even lose it. Hmmmm.......several come to mind. Yup, the messenger got shot. But, those sellers are still sitting on their properties that are now stale.

If I can say one thing to the defense of the agent who took the listing: she was also the agent who sold these people the house at the height of our market in 2006. I can see how awkward it would be go in 2-1/2 years later and say the home is worth less than what they paid for it. However, with all the news out there about the real estate market and the ecconomy, there are a lot of facts to back up that statement, no matter how hard it is to say out loud.

Great job in telling them what the truth is. We lose them too when we tell them what they need to hear, not what they want to hear. I would rather not have the listing, then an overpriced listing that will never sell.

Sherry "GOOD FOR YOU!" You handle this very well by telling them the truth. Just keep an on it.

Sherry,

Sometimes coming in SECOND,or even THIRD, is the BEST postion to be in!

I've turned down 5 listings in 2009...... the Sellers had no realistic idea of what their property would sell for IN THIS MARKET. 2 even asked that I"TRY" at their inflated price; I said "no". I'm not willing to use my marketing dollar to advertise non-salable properties.

Good blog!

Kathy Opatka, Re/Max, OCEAN CITY, MARYLAND

Our team often has to turn down listings. We simply will not take them if they are overpriced. You didn't loose...they did.

Sherry, you're right, sometimes not winning is a good thing. You don't want sellers that are not cooperating.

Sherry

I had something similar happen to me. But it was more of a commission then price. I asked for 5% the other agent went for 4% and the price was $15,000 more. The listing is going on eight months now and the house is still up for sell. Should I go back when the contract expires in about two months.

650K! In this market when the comps do not support it? The other agents should be brought up on ethics charges. When this used to happen to me in the past, I used to explain to the sellers it was buying a listing.

Just learn from the experience. I farm a neighborhood that has a swing of well over $100/sf. Part of my presentation is to tell owners this and that it is very easy for other agents not to compare apples to apples. I turn it into somewhat of a joke by saying that I can use this differential to help homeowners with their tax values as the county is about as clueless as many agents that do not know the area. I mention this as it can be very easy to get valuations that are dramatically different.

Now that seed is planted in their head. I just one a listings at $688k and my competitor was at $749k. Not as dramatic as yours, but the idea is the same. So who did the owner call. Me. He pulled out the agent's comps and asked me to explain them and I did. I told him that I would love for his home to sell at $749k, but my job is to sell your home, not list it. I say, as you can see $749k is not the market; moreover it is not in the radar screen of the market.

Sherry,

There still are sellers who refuse to accept what the real estate market is all about today. In this case here, the sellers will start thinking about you in a few months when the house keeps sitting there unsold, likely with not one offer.

JAN

I have a friend that says she wants to be the first love, the second wife and the third Realtor. ;-)

You did the right thing. Better to turn them down now than let them down later.

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I Didn’t Get the Job

I really like Dawn's comment....true...think of the time and money saved on marketing to a listing that was doomed to fail....someone once told me, sometimes the best listings are those you don't get...

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Sherry Spengel, Fine Homes Specialist