WOW! I Screwed Up BIG!!! Mispriced My Listing $530,000 Less Than I Should've!!!! C'Mon, Man!!!!

I do look at the actives to price my sellers a bit more aggressively.  In this case, you definitely did that!!!  I wrote a post like this on another property that was $200K less than the one across the street - and the other agent totally lost it with me...  hope that doesn't happen with you as well!

I just attended an ethics course today where we were, of course, handed a copy of the code of ethics in which it was stated that an agent will not "intentionally mislead the seller as to market value". I think they failed on this one.

Todd and Devona, I see a lot of this lately.  Not to this exent but I still see a lot.  I do pull active comps just to show what the competition is doing but I would never price according to active listings.

Good news - that overpriced listing will help sell yours.

Good luck,

Mike

Imagine that, an over-priced home. Sometimes it is because an agent is unethically trying to get a listing that he will then hammer the owners into lowering the price later on. Or, more likely, the owner swore his/her house was so special that it deserved to be offered way above the current market prices and the agent decided to play along.

In either case both the agent and the seller will end up losing in the end. And, unfortunately, it will also cause problems for other listers in the area. However, since the difference is so much, only a fool would not realize what was going on and would instead rely on their own agent's abilities.

How sad it is that agents are still taking over-priced listings. Yet they will swear that the practice is terrible. Then the very next day they will rationalize why they had to take one that they know will not sell at the list price or anything near it. Worse, they then ask ME or YOU for feedback to use to get the seller to drop the price. Sorry kiddo, not playing along with that one.

And in the end, guess what, the appraiser will come in and yank the rug out from under most of the financed sales since the home will not appraise out. :) Surprise!!!

PS In reference to a comment above, here in Florida our appraisers will NOT use an active listing or pending listing to determine the value of a property. Only sold properties are used in calculations. So I do not see an agent that takes a property at 300% over the competition doing anything to drive up the market. Unless he can sell it for that price, it should have no effect whatsoever on the appraiser's results. At least not in Florida.

Also, it is an ethics violation to mislead a seller to get a listing, but if you make it clear that you think the home is worth $Y and the seller insists that it is worth $YYY, I am not sure that you are in a violation by taking it. Foolish perhaps, but not unethical. Afterall, you did first tell the customer what you thought it was worth. I he/she decides to disregard your advice, one would think that was then their problem not a violation on your part. Would love to hear NAR's expert weigh in on that one in the NAR magazine.

Ah yes... Buying the listing.  A great strategy for failure... in a bad way. 

The old method of "what do you want" plus a commission is no way to work in this or any other market.  REALTORs are hired to be professionals and to price according to market data, otherwise, why would a person pay our commissions?  If you went to your stock broker and he/she said - "I don't know, what do you think you should invest in?" you would leave.

We have to earn our keep.

It sounds like "YOU GOT JACKED UP!!!"  LOL  Sorry, I had to. I see a lot of listings where it is painfully obvious that the listing agent never even looked in the MLS at all never mind looking at solds.

WOW... I'm sure the well over priced homewillbe be on the maket well after your listing has sold

This sounds like an extreme case of overpricing.  I think Kris may have a point that they've listed it for a reason other than a true intention to sell it.

This was an interesting way to make your point. But you point was excellent -- you do nobody any good by taking over-priced listings.

Yep Yep Yep you sell in spite of the one who is asking too much!  They did you a favor!  Cool Man!!  :-)

From the desk of David Dee,

Looks like you priced it right and probably will end up selling the other overpriced listing when they realized it is not moving. Just tell them, c'mon man! Let's get it sold! :)

This business ceases to amaze me.  Best of luck!!!!

My favorite line to sellers is "I'm not here to be your friend, I'm a professional I'm here to tell you what it would take to get your home sold."

I would call that listing agent and ask if they want to host an open house on the same weekend.   =)

Well, I would like to play devil's advocate here. 

Clearly, you have underpriced the home by $530,000 because you don't know what you are doing!  You need to get with this other agent's game plan.  I mean, he does have a $700,000 listing and your's is only in the $200,000 range.

In 5 years, I really have only had one person walk away really disgusted with me.  I took a listing that I knew to be too much.  I asked my sales manager what I should do and her response was "take the listing, better you have it than someone else".  That seller eventually pulled the listing from me and sold the house for half with someone else (after 2+years on the market).  Good for you for informing your seller appropriately.

If a Realtor has a seller that won't listen to his/her advice as a professional. Start steppin'. You'll probably have problems with them down the road.

Over-pricing a listing can cause a huge problem for short sale agents. In short sales, lenders normally require a BPO.  BPO agents are required to use active and sold comps. From personal experience I know that there are times when the BPO agent knows the active comps. they are using are over-priced, but they have to use them because there is nothing else available.The bank looks at the BPO. Because they aren't familiar with the area, they base their approval or denial of the sale on inaccurate information.  Very frustrating. Who's interest does the listing agent think he/she is looking out for? Over-pricing a listing creates a lose/lose situation for everyone, especially the seller who now has unrealistic expectations.