My Buyer Wants to Know Why This House is Priced So High
Having listings is a blessing. In real estate, listings make the phone ring. The calls we Listing Agents love are the ones from Buyer's Agents who are about to send us offers, or from buyers who don't have agents and may need our help finding a home. Unfortunately, those aren't the only calls we get. Oh I wish they were. That would be too perfect.
Here's a call I got Friday, and it's typical of calls like it.
Caller: Hi. This is Fred Fredrickson of ABC Realty. I have a buyer interested in your listing on Kingsford Road. My buyer saw one just like it the other day priced for $175,000 and was wondering why you are priced at $199,000.
Me: Just like it, huh? So it had new carpet, new tile bathroom floors, new hardwood floors in the kitchen, new cabinets and new counter tops? And it backed to woods?
Caller: She said it was the same. (I'm wondering if he has ever SHOWN her a property. Didn't he see the one he's talking about.) So we're just wondering why you are priced so much higher for the same thing?
Me: Well, Fred, I have to tell you. Given what you are telling me, I have to wonder why in the world you are on the phone with me and not writing up an offfer for a unit that you found that is the exact same as ours for nearly $25,000 less. I mean, if she's a motivated buyer and found the same thing, why waste time with me?
The conversation didn't go much longer, though Fred did try to justify his call. There were probably a couple of factors that he and his buyer didn't understand. One is that just because a home has the same number of bedroom and bathrooms and is the same community, doesn't mean it will sell for the same price. Secondly, when it comes to Short Sales, which my listing and the other were, not all Listing Agents are created equally. I understand that the first thing a bank is going to do is a BPO to figure out if the contract we've submitted is in line with fair market value. When a BPO is conducted, the agent conducting the analysis is not told to look at Short Sale and Foreclosures only. They are told to look at the most recent, comparable sales. Period. And comparable means condition and size, not type of sale.
My guess is that the $175,000 Short Sale will never get to closing because that Listing Agent underpriced their listing simply because it was a Short Sale. The banks aren't falling for that. I know that. Fred and his buyer don't. They'll learn the hard way.