Don’t Do Déjà Vu If You Want Us to Work with You

I love the saying - First love, 2nd wife and 3rd real estate agent! It's so true.

Houses are like any other product. If the merchandise does not sell, it is because the buyers are purchasing other products that they feel are a better value for their money. The buyers determine what the house is worth, not the seller or the real estate agent. The agent controls the advertising but if the buyers do not see value...they won't look at it or make an offer.

I am glad you are holding your ground on this point.  It is a waste of time, energy and money to market a home that is not priced properly.  It boggles my mind when sellers don't see that they are overpriced, and keep holding their price, with no results.  The saying "nothing changes, if nothing changes" comes to mind.  I hope you are able to get through to these people so that they list with you at a price that will help them sell their home.  Thanks for the post!

Debe, just a great post what most of us feel and say to others and sellers who just do not get it.  However, there is always a realtor who will do it again & again...buyers know what has value & what doesn't!

In our neck of the woods its called buying a listing, and unfortunately too many agents think that they can do the sellers grind when it comes to getting the prices down once they have the listing, or the agent thinks that they can pick up some buyers off the sign or both. Hopefully, the two previous agents were able to get some business.

This is one of the things I'm concerned about when I hear the constant trumpeting, about the housing crisis being 'over'. Sellers are sure to decide now they can suddenly get whatever price they were fantasizing about back in 2009.

Hi Debe, this must have been one strong seller, that no one was able to convince to reduce. Great way to stick to your guns!

Pricing, marketing...class dismissed. (putting chalk back on ledge) $300,000 extra piled on for wiggle room is not leading the market in pricing, motivated to sell.

I'm at the point in my not so hungry Golden Years that I won't work with a client that I don't have an all encompassing exclusive buyer agreement with. Call it lazy or whatever you want but I just don't need the hassle of not having total control of my deals.

Debe

Just wanted to let you know I found this via a repost by Richard Witt. I love your last statement, cheers cvc

Could we video you and send it to EVERYONE who calls who is blaming the first (or second, or third) agent? 

Debe -

All that you say is true.

This is often not a question of how many agents have been involved - unless previous agents made errors other than price.

Pricing is an art not a science.  Unless you are talking about a home in a large subdivision with a small number of home models and an adequate number of recent sales, pricing is the hardest thing we do.

But it is rare that you cannot find some good comparable sale data. A price should be based on that data, not the agent's best guess or the seller's hopes.

If the seller will not respond to sales data, you are left with the forcefulness of your personally/reputation.

It's fair to ask how that previous agent came to the too-high price. Usually, it wasn't the agent's price at all.

It is always good to talk about the truth about buyers.  Most buyers don't want to waste their time or the time of sellers (or agents).  They simply do not look at houses at prices they cannot afford.

Therefore, traffic is based/conditioned on buyer and agent perceptions of value.

If a house has been listed for a long time with little traffic, that doesn't mean it has not been considered by buyers and agents.  It does mean that those buyers and agents who have looked at the listing pictures and details have concluded it was not worth going to see......at or near the listed price.

Expecting that the seller needs proof of the point, I would go into that listing appointment armed with recent data on the ratio of sales price to last listed price for closed sales of homes in that market area and price range.  It usually makes it crystal clear just how important list price is to selling success.

The last data set I used (on Friday) showed that the median ratio of sales price to last listed price for close-in counrty properties here is 97%.  Half sold for more and half sold for less. For every one selling at 94% one sold for 100%.  For every one that sold for 91%, two sold for 100%.  Very few sold for less than 91% of last list.

The total time on market for sold homes varied drastically, often many months, but the time to pending status after that last price reduction was uniformly quick. The difference in time-line was how quickly the price was placed in a zone to actually be considered worth seeing and/or writing an offer.

Therefore, pricing a home more than 3% over what the data suggests is risky/costly for agents and foolhardy for sellers, who as you say, may quickly find themselves holding on to a stale property - that will have to be drastically reduced just to spark new interest.

When a house goes on the market - when it hits the MLS (hopefully with a full set of pix included), it is considered by:

Those who started looking a year ago.

Six months ago.

A month ago.

A week ago.

Yesterday.

The agents who have been looking and their clients who have been looking receive an email that day from the MLS system or some agent site, showing them the listing - if its priced within the range they have pre-determined.

They either go see it right then (if they are truly motivated buyers) or they blow it off as not worth its price or their time.

After that the home is considered only by those making a new search - usually those buyers who start looking:

The next day.

The next week.

The next month.

Six months from now.

A year from now.

In other words, price it right at first:  or kiss off half the buyers who will ever consider buying in the next year.

Debe,

I have a question that I ask sellers who fit don’t understand the need for a price reduction.

Mr. /Mrs. Seller it your intention to have your house for sale or to actually sell your house?

Feel free to use the question. The seller’s response will vary from indignation to an expression that accompanies a light going on. In any event, an interesting discussion should follow.

Debe, Congratulations on the listing.  It's no fun taking an overpriced listing and does no one any good either.  Nicely done and said.

Hi Debe, yes it all comes down to price.  House on a busy street? - busy for that price.  Poor condition? - poor for that price.  etc.

It's very true. I get buyers that ask all the time about homes they are interested in that have been on the market a while "what's wrong with this house, how come no one has bought it yet?" Most of the time it's that the price was way too high for too long.

List Low and Sell High - That is what is working in this market.  Get him and get the bidding going.

Debe,

Congratulations. This post is now featured in "The Law Of The Land." :)

Steve