Why Overpriced Homes Do Not Sell in Las Vegas

By
Real Estate Agent with Simply Vegas Real Estate

Las Vegas, Nevada – I received a phone call yesterday from a lady who wants to sell her home.  This is the type of call every Real Estate agent dreams about.  We talked for several minutes and set up an appointment to meet at her house.  Needless to say, I was excited. The minute I hung up the phone, I looked up her property in the Multiple Listing Service and was surprised to see she was currently LISTED WITH ANOTHER BROKER, and had been listed for over five months. 

 

My first thought was, “What went wrong?”  Why didn’t the home sell? Did it have crazy colored paint or carpet?  Was the landscape in bad shape?  I looked at the property photos and they looked awesome.  In fact, the home looked very nice.  If the condition of the property wasn’t the problem, maybe it was overpriced?  I decided to do some research.  Sure enough, I discovered her home was priced more than $50,000 above the highest comp in the area.  I was beginning to see why her home hadn’t sold; however, I wanted to hear her side of the story.

 

I called back right away and politely let her know I noticed she was listed with another Broker.  I asked what happened, and why she thought her home wasn’t selling.  She said, “I’ve been listed for over five months and only had four showings.”  Additionally, she said, “When I decided to sell my home, I interviewed five different agents.  Four out of the five said my home would sell at certain price, however, the fifth agent felt he could sell it for much more!  He said the other agents were too conservative, and bragged how he consistently sells his homes above market value.  He even offered to reduce his commission…so naturally, I hired him.” 

 

As she spoke, I could feel her frustration.  She added, “My agent vanished into thin air.  He doesn’t return my calls, and the last time I spoke with him to let him know the house wasn’t showing, he replied, “That’s because we are extremely overpriced. “  She was growing more upset and said, “How can he say the home is overpriced, when he’s the one who advised me price my home this high?  This was why I hired him.”

 

Unfortunately, as the saying goes, “If something sounds too good to be true, it usually is.”  Every Seller wants to get top dollar for their home; however, Sellers must be aware of smooth talking agents who promise the moon and stars yet fail to deliver.  In order to get hired, some agents tell Sellers exactly what they want to hear, however, are they being honest?

 

Selling homes for top dollar involves much more than taking pretty photographs and uploading them to the internet.  While marketing is important, you must price your home correctly to attract the largest pool of Buyers.  For example, did you know that if you price a home too high, you may find yourself in a position where no Buyer obtaining financing will be able to purchase it?  Banks lost billions of dollars in the housing crash of 2008.  Therefore, banks have become much more cautious approving home loans.  All home loans are subject to an appraisal.  By law, it cannot be an appraiser of your choosing.  The bank chooses the appraiser, and they determine the value of a home based upon recent closings in the area of similar size, upgrades, number of bedrooms, lot size, etc. 

 

Experienced agents understand the appraisal process well.  In order to properly represent Buyers, good agents will advise them of the dangers involved placing offers on overpriced homes.  Once a real estate contract has been accepted between a Buyer and Seller, Buyers have a specific number of days to complete their home inspection and appraisal.  The average appraisal costs between $350 to $400 dollars (sometimes more).  Home inspections range in price from $250 to $500 (or more).  Both of these expenses are paid upfront by the Buyer.   If the home does not appraise, a Seller is under no obligation to lower the contract price to meet the appraised value.  A Buyer may quickly find themselves out of pocket the cost of the home inspection and appraisal, which together may cost $600 to $900.  Buyers usually become upset after losing this money, and many fire their Real Estate agent, especially if the agent didn’t properly review the comps with them or disclose the dangers of writing offers on overpriced homes.  This is why it is important not to price your home too high.  You may actually scare away every experienced agent in the city.

 

The fundamentals of Real Estate have been tested over time.  There is no magic pill.  Homes that are priced correctly will sell.  Overpriced homes will sit.  A good agent will recommend pricing a home consistent with the comps or slightly above, depending upon market conditions, condition of the home, etc.  Beware of agents who overinflate the value of your home hoping to trick you into hiring them.  Many are willing to do this, knowing the home won’t sell; however, their plan may involve hitting you up with multiple price reductions over the next few months, until the price is low enough to attract a Buyer.  Meanwhile, they get to place a “For Sale Sign” in your front yard, (with their name and phone number).  Even if your home doesn’t sell, how much business will they be able to generate from that yard sign which essentially acts as a billboard, advertising their services to your neighbors, potential Buyers, etc.? 

 

Myers Team owners Bill and Francoise Myers with Simply Vegas Real Estate are Las Vegas Top Producing Real Estate Agents and specialize in Seller representation.  Call The Myers Team direct at 702-677-4343

 

Visit The Myers Team web site at http://www.LasVegasList4Less.com

 

For Short Sales, visit: http://www.NevadaShortSaleInfo.com

 

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