Overpricing Your Listings is a Crime

Managing Real Estate Broker with Windermere Real Estate / NCW

It's so sad when sellers hire an agent who tells them what they want to hear instead of what they need to hear.

I'm always a little shocked when agents massively overprice homes - either to get the listing or because they don't know better.

Real estate professionals who read the post on our blog about overpricing Leavenworth homes won't be shocked, but sellers need to be educated about the dangers of overpricing. If your house sits on the market until fall or even next summer, you will definately get a worse price for it that you would right now.

Comments (8)

Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Geordie,  Not sure which is worse - not knowing the market price or listing at an unrealistic price point.

Mar 25, 2012 01:09 AM
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

I belive it is greed and a crime. It is a total diservice to the clients.

Mar 25, 2012 01:10 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

I could not agree more.  It costs time and money for the client in a down market.

Mar 25, 2012 01:11 AM
Raymond Denton
Homesmart / Evergreen Realty - Mission Viejo, CA
Casta del Sol RealtorĀ®

My worse purchase nightmare was with an overpriced listing.  The appraisal came in significantly below the listing price, and I was working with a brand new Agent that didn't have enough experience to know what to do, and the Seller's Agent was completely unresponsive.  We needed her to provide the Appraiser with the comps from her CMA, and she never returned emails or phone calls.  The Brokers had to get involved, but that didn't matter, the Listing Agent remained unresponsive.

It was a complete nightmare.

Mar 25, 2012 01:14 AM
Malcolm Johnston
Century 21 Lanthorn Real Estate LTD., Trenton, Ontario - Trenton, ON
Trenton Real Estate

I must be different from everybody else, but I don't see overpriced listings as crimes. Sometimes clients are aware that their home is overpriced (in regards to the current market value), but know that with enough time and patience the right buyer will come along and see the unique characteristics in the home and land. Not all people have the same motivation at all.

Mar 25, 2012 01:26 AM
Geordie Romer
Windermere Real Estate / NCW - Leavenworth, WA
Serving Leavenworth, Lake Wenatchee, and Plain

@Bill That's a good question. I am surprised how few agents preview homes in our market. Their lack of market knowledge is horrible.  Overpricing as a means to get a listing is against the Code of Ethics, but I'm sure it's common.

@Sarah and @ Tim - Thanks for stopping by.

Mar 25, 2012 02:46 AM
Geordie Romer
Windermere Real Estate / NCW - Leavenworth, WA
Serving Leavenworth, Lake Wenatchee, and Plain

@Raymond Why list a house at a price it won't appraise for? Is the seller really looking for a buyer who is both naive and willing to pay cash? Seems equivalent to retirement planning using the lottery.

Mar 25, 2012 02:47 AM
Geordie Romer
Windermere Real Estate / NCW - Leavenworth, WA
Serving Leavenworth, Lake Wenatchee, and Plain

@Malcolm It depends on the property and the market. In a flat or declining market, a property that sits will become stale and decline in value. The seller will chase the market down. I had a seller who had a condo for sale who continued to be in the middle of the pack as far as pricing went for comparable properties. After years without action and when other properties sold, they finally decided to be the cheapest condo and sold in a few months.

I guess it depends too on how overpriced we are talking. 5%? 10%? 20%?  It's not uncommon for me to preview houses and find that many are $50-$100,000 over market value.  Seems irresponsible to me.

What would you do if you drove into a small town with a single gas station that was charging $6 a gallon for gas. We would call it gouging, but maybe their just "testing the market."

Mar 25, 2012 02:52 AM