Tip for listing in tough markets
Do you fully educate sellers to help them understand how declining markets work? In order to educate your sellers you must fully understand the dynamics yourself. When a potential home seller balks at your recommended price do you immediately cave in and agree to list higher or do you hold firm knowing that you may have to walk away if the seller doesn't want to list at a realistic price?
Many listing agents in our struggling markets are focused on one thing, getting the listing. They are so concerned with getting the listing that they set the sale up for failure from the beginning. When a listing agent lacks the courage to bring the seller to a correct price for the market, they fail the seller, the fail themselves and most importantly the fail the market.
Every overpriced listing compounds the decline in the overal markeplace by adding yet another home that won't sell to an already overburdened inventory. As the inventory grows, pressure to reduce price grows. When a listing stays on the market withou a sale, the seller is encouraged to reduce their price. However, again the seller is not fully educated about the continued decline and the reduction is inadequate. This pattern follows a series of "stair step" inadequate reductions until the listing expires.
When working with sellers, taking an overpriced listing is expensive in terms of time, energy and cost. Factoring in your time spent servicing the listing, the marketing dollars spent, the anxiety over dealing with a unhappy seller and having conversations about reducing price only to have the listing expire is not what you are in business to do.
The negative consequences of taking overpriced listings is that the seller has lost time, patience, equity and confidence. The listing agent is left without a sale, is out of pocket for expenses and has lost the goodwill of not only the seller but everyone that seller knows.
If this sounds familiar then you probably have tried to sell without success. If you have a home listing that has expired go back to the CMA you presented to your seller. Do the same CMA for today's market, make a note of the difference. If you had educated the seller and had listed that home just below the market price at that time, it is more than likely that that home would have sold.
Price rules in this market. Price is king and everything else including conditon, amentities and appeal are only secondary factors. It is crucial when doing a CMA that you consider that SOLDS went pending 4 to 8 weeks before they closed. During that 4 to 8 weeks the market continued to decline. Using SOLDS without factoring in the decline will make your listing overpriced from the day it is listed! In my Southwest Florida market it is like the wild west when you look at active comparables. Prices are all over the place from ridiculously high to absurdly low distress sales and there are hundreds in every category.
More than every you must examine the competing homes before you set price. Look at the lowest priced competing homes first then compare them to your listing. If they are as good or better you will need to show these homes to your seller.
Remember in every market it is the best priced homes in the best conditon with the best features that sell!
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