Let me spell it out for ya! P R O P E R P R I C I N G!

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

 Howdy my friends and future customers. Today I want to write a little bit about proper pricing and what happens to your property if you don't get the pricing right, right from the get go. I wrote a post last August about a listing appointment I went on, it was titled "Counting the chickens before they hatch". This particular listing appointment came from one of my expired listing letters and I knew before I went that it was going to be difficult to get it priced properly. It was overpriced by about $65,000. You can read my prior post if you want more details.

Anyway, I thought I had the listing but after about a week of going back and forth on pricing and how much they were willing to pay me, I turned it down and they listed with another REALTOR®. This property was first placed on the market in March of 2006. The market was still pretty good back then in Poinciana Fl. And it would have been a good time to get the house sold. But unfortunately they were way too high on price and it just sat.

Now, when they met with me in August of 2006, there still would have been a very good chance of getting it sold. Of course in order for this to happen it would have needed to be priced right. The price I had suggested of $289,000 would have worked. How do I know? Well, I've been selling properties in Poinciana Fl for 13 years and have sold hundreds of homes, including three on their street. I'm an expert on pricing Poinciana real estate. The market was just starting the down turn in Poinciana and they were not going to get lucky. Getting it priced right was critical if they truly needed to sell. They chose not to take my advice. They re-listed at a higher price, than I had suggested, and with a REALTOR® who charges a couple of points less than I.

Let's take a look at the listing history. This will show you how they lost the pricing game. As of today, the property has been on the market for 16 months and counting.

  • March of 2006 it was first placed on the market at $360,000 ($70,000 too high).
  • July of 2006 it was reduced to $325,000.
  • August 0f 2006 the listing was withdrawn. This is when they met with me and I had suggested $289,000.
  • September they listed at $299,900 ($11,000 too high). Values in Poinciana Fl have now started a rapid decline.
  • October of 2006 they reduced the price to $279,900(too little, too late).
  • March 13th of 2007 the listing expired.
  • Two days later, they listed again, at the same price $279,900. Same REALTOR®.
  • Two days later they reduced it to $264,900.
  • June 2007 (3 months later) it when pending.
  • Three weeks later the deal fell through and it went back on the market at $264,900.
  • Two days later they reduced it to $259,900.
  • Three weeks later (July 2007) it was reduced to $254,999.
  • The next day it was withdrawn.
  • Three days later it was listed at $259,900 with a new REALTOR®. Where it currently sits.

So here we are, 16 months and three REALTORS® later, still on the market. Still trying to sell. And after $100,000 in price reductions.....still over priced. The market in Poinciana Fl has crashed and values have and are plummeting. This property MAY be worth $229,000 IF they get lucky.

Folks, does it get any clearer than this? If they would have priced it correctly from the get go this house would have sold a year ago for $40,000 more than where it is listed now. Chasing a declining market downward is a losing proposition. It will cost you thousands of dollars.

I hope this illustration sheds some light on the importance of proper pricing. You will NOT get lucky in a declining market. Contact an experienced REALTOR® and listen to what they have to say. Don't make me write a Blog post about your house! What say you?

All content copyright © 2007 - Broker Bryant Real Estate Ramblings

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Comments (47)

Dave Rosenmarkle
Highland Realty, Inc - Arlington, VA
33 years of providing fully satisfying service!
I think this issue will go on as long as there are houses to sell. A lot of it really boils down to how effective we are in our market analysis and our ability to communicate same. Many Realtors miss getting listings because that's their focus instead of honestly addressing price, commitment to marketing strategy and the seller's needs. 
Jul 21, 2007 11:37 PM
Doug Jackson
WPI-Gatefield Realty - Leland, NC

Who are these Realtors who take these overpriced listings? Yes we have to be obedient to our princables wishes but thats after the agreement. To take such a listing and hide behind the obedience responsibility is a sham. These "Realtors" are looking out for themselves and prospecting for buyers. 

SHAME                                                                                                                                                                                                                                                                                                                                                              

Jul 22, 2007 05:25 AM
Thesa Chambers
Fred Real Estate Group - Bend, OR
Principal Broker - Licensed in Oregon
what is funny is in our market this information is available for years on the MLS - so even if they get wise later... the info will always be attached to the address - it shows them not to be real motivated... say they take it off the market and wait for a change in the market - then relist it.... a good agent here will pull the history.... and see all that - share it with the buyer - it could cost your $$$ even if the market changed.
Jul 22, 2007 12:35 PM
Melissa Nottingham
Coldwell Banker Advantage - Winfield, WV
WV Real Estate Agent

I have been through this as well. They got what I told them they would.  They went with a flat fee brokerage and it took forever to sell because they also overpriced. Always someone out there willing to take a listing they know is overpriced. What can we do? Sit and wait and hope they 'see the light'.

ps. Cant wait to see the next video!

Jul 22, 2007 12:37 PM
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

I recently lost out on a listing where I told the people that their house was worth about $369,000.  Another agent told them that it was worth $425,000.  They pointed this out to me and I went through the comparables and told them that I couldn't justify that price.  They ended up going with the other agent.  

I was curious, so I kept an eye on this property as they lowered the price, lowered the price and lowered the price.  It went pending at $365,ish.  It pissed me off that the other agent b s ed them to get the listing and then beat them down to where they knew that it should have been in the first place.

 

Bob Mitchell

ValueList Real Estate Services, Inc. 

Jul 22, 2007 01:03 PM
Jonathan Vetter
Mercury Lending - San Francisco, CA
I say hire Broker Bryant for Poinciana Sales.  Great post BB.  I agree with you completely, pricing to get the demand will pay off in the long run.
Jul 22, 2007 03:57 PM
Gary Bolen
McCall Realty - South Lake Tahoe, CA
CRS - Lake Tahoe Real Estate Information
Well, did you sell a house this weekend? Or are you going to have to do a sequel to your hit video next weekend?
Jul 22, 2007 04:51 PM
Anonymous
truth
Some sellers are truly arrogant, but they will consistently lose more and more money.  they are fools.
Jul 22, 2007 05:57 PM
#35
Angie Vandenbergh
Crye-Leike, Realtors - Memphis, TN
A Crye-Leike Blogger

Just in case you didn't know... this post was featured in the Active Rain Week in Review 7/15/07-7/22/07, written by Toby Boyce. Congratulations!

Jul 22, 2007 11:48 PM
Katrina Madewell
Charles Rutenberg Rlty- More than 5,000 agents(813) 777-1196 - Tampa, FL
Tampa FL Homes for sale | Tampa Bay - (813) 777-1196

AGREED!  I guess some people just don't get it!  We are clearly NOT in the Market we were in 2 years ago! good post BB

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Jul 23, 2007 01:56 AM
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

Bryant: Sad to say, I've had personal experiences with this...... I learnt my lesson well. I also think that it's not accurate to take past 6 mths stats anymore. It should be more like 30-45 days. How do you feel? My market is also rapidly changing.

Back in Nov 2006, we could never find houses over 3000 sq.ft. (1-2 yrs old in some newer communities) for less than $270K plus. Now, a ton of it around 215K - and about to go into foreclosures. These houses continue to sit in the market because they have no character....... Houses bought by investors....

Jul 23, 2007 10:14 AM
Desiree Daniels
RE/MAX Tri County - Robbinsville, NJ

Pricing is EVERYTHING - now what do we do to stop the competition from "buying" a listing from a seller by just telling them what they want to hear to get a signature.     I see that alot.   If you're going to be interviewed they the honest approach when it comes to the number.....  have some INTEGRITY and get the listing on your own merits and not by overpricing it!!!!

Okay now I am done ranting.... thanks for a great topic!!!

Jul 23, 2007 02:40 PM
Bob Sloop, Consultant, Indianapolis, IN
RS Mortgage Consulting - Indianapolis, IN

Yes, this is very true, do things right from the get go, and the house will get sold.

Jul 23, 2007 02:52 PM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Well hey there everyopne. Looks like I abandoned this post. Sorry about that. I was a little busy yesterday. My market is flooded with over priced listings. It could be as high as 50%!!! Of course the biggest problem in my market right now is nothing is selling at any price. Very difficult time to sell in Poinciana Fl. It just ain't happening.
Jul 24, 2007 12:57 AM
Debbie Cook
Long & Foster Real Estate, Inc - Silver Spring, MD
Silver Spring and Takoma Park Maryland Real Estate

I like the idea of being someones's First Love, Second Wife and Third Real Estate Agent!

Sellers right now, can't or just plain don't want to see into the future (we have to tell it like it is and show or help them see it), they think it is still 2005!

Jul 25, 2007 04:08 AM
Susan Milner
Florida Future Realty, Inc. - Cape Coral, FL
Cape Coral Real Estate Broker, FloridaFutureAgents

This is SOOO extremely important. I tried to explain this to some sellers, who called me, the other night.

They are about to expire with their current agent. I gave them a price that is can sell, 2 other agents gave them higher prices & told them that was better because 'the buyers can make offers'. How crazy is that?

So when they don't get any offers & the buyers that were looking while their house was over priced buy something else - they are left with more reductions after more reductions to get in line with other buyers.

They told me that my listings may be selling because I may be "under pricing' them.

Don't think so. If you had something under priced there would be multiple offers out the door.

What can you do? You can't help those that won't listen.

Jul 27, 2007 05:54 AM
Joe Sampson
Exit Realty Experts - Saint Augustine, FL
Very good - I run into this all too frequently!
Jul 27, 2007 06:53 AM
Christopher Myers
Orlando Property Group - Orlando, FL
Greater Orlando and Central Florida Real Estate
Bryant, as I'm up in Lake Mary, I feel your pain.  I still run into seller's every day who think the market IS what it WAS 2 years ago.  They don't listen and it's almost amusing to check the MLS every now and then wondering what they've dropped it to now.  I don't get it...I feel like so many people just want to pay a Realtor to be a yes man. 
Sep 27, 2007 09:14 AM
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services
Bryant- We have a more stable market yet it still sucks. Our prices have to drop another 28% to reflect correct market values. We would have been fine if we had not lost billions of dollars from foreign investors who come here to buy vacation homes and with the new homeland security measures, even friendlies were not able to buy. But we have tons of foreclosures, not as many as the west coast of Florida but we had lots of wannabe investors wanting to flip and got caught in the bubble! Katerina
Sep 27, 2007 10:09 AM
Randy L. Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645
One of the communities I service has had some declines, nothing like that.  I turned down a listing of a small home and we have seen a similar pattern with the agent who bought the listing for $40,000 more than it was worth.  It is now $20,000 less than it should have sold for in the beginning.
Sep 29, 2007 04:32 AM