WHY DO LISTING AGENTS TAKE OVERPRICED LISTINGS?? THE SECRETS REVEALED!
Lenn Harley has written an excellent explanation of the behavior that is behind agents taking overpriced listings. This behavior damages the seller and the credibility of our industry, as it calls into question the professionalism and the good judgement of agents and brokers who play along with creating false expectations among sellers who insist on overpricing.
THE GLUT OF OVERPRICED LISTINGS IN MANY MARKETS IS A NIGHTMARE FOR BUYERS, SELLERS, AGENTS and LOAN OFFICERS. That said, there's nothing new in the practice.
Inspired by a thoughtful post by Shirley Soforic, KMC BLOG.....HURTING HOMEOWNERS FEELINGS, after
watching agents not only accepting, but chasing overpriced listings for decades, there can be no reason to excuse the practice of listing homes for higher than market value other than THE AGENT WANTS THE LISTING.
WHY? If all the agent was doing was avoiding "hurting the owner's feelings", THEY WOULDN'T BE TAKING THE OVERPRICED LISTING. Filtering through ACTIVE listings to show homes is quite time consuming. This practice produces a bloated inventory and totally distorts the accuracy of absorption rates.
EXAMPLES:
- Silver Spring, Maryland has 395 ACTIVE listings that have been on the market for more than 200 days.
- Woodbridge, Virginia has 359 ACTIVE listings that have been on the market for more than 200 days.
Agents give high price opinions or avoid giving the owner the facts in order to GET THE LISTING.
HOW? The owner sucks the agent in by declaring that they "will only take" a minimum amount. Then the agent sucks the seller in by accepting the listing and giving the owner false hope.
Don't forget, agents take listing for more reasons than just to sell the house. Listed below are examples observed over the years.
* Agents are looking for buyer leads. (open house, phone calls)
* Agents get a sign in the yard. (name recognition)
* Agents get their listing on the production board.
* Brokers don't discourage the practice because they get MARKET SHARE.
* Agents always believe that they'll be able to get the price down.
* Agents don't know how to determine market value.
"THE SELLER INSISTED". Many home sellers are fine with listing their house at a high price since they mistakenly believe that they "need negotiating room". Or, they just want what they want. If a seller doesn't need to sell, they can be demanding on price. That doesn't mean the agent has to "enable" the overpriced listing. If agents continue to accept these listings, it deminishes our image when homes sit on the market for 200 days or more.
Whatever the reason, I suspect that, considering the cost of taking, preparing, advertising, maintaining a listing, hurting the owner's feelings is way down the list. Agents often make a significant commitment to use their resources to circulate and market properties. I recall reading a post by Missy Caulk some time ago wherein she said that, taking a listings costs her team about $2,500. That's a lot of money. Granted, many "volume" agents don't commit resources in that amount. Still, there are costs, even if it's just the agent's time. After all, time is money.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
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