Overpricing a Home. Whoa Nelly!

By
Real Estate Agent with Prado Real Estate South UT DRE# 6541633-SA00
http://activerain.com/droplet/59Sd

Overpricing a Home. Whoa Nelly!

 

 

A new agent secured a listing, though it was overpriced. She showed it to home buyers a few weeks later, who called on the sign. They loved it! The home's list price was $250,000. Offer was $227,000. 

 

She became excited about the idea of double-ending the sales transaction. Seller asked for current comps of like-type properties because he thought the offer should have been closer to list price. 

 

The numbers came in lower than the offer.

 

Overpricing to get a listing can have adverse consequences with a negative outcome. The homeowner relied on the new agent to be the professional and thought she fell short of the expectation.

 

Seller felt the agent was not looking out for his best interests and refused to allow dual agency. The sale failed due to a breach in trust and the buyers refused to pay more than the home's worth.

 

Though not appraisers, when taking on a residential listing, agents need to ensure the comparables are similar to the subject property and up-to-date or a disastrous like-type situation like this can occur.

 

Prior to pricing the home, the new agent should have met with her broker to do a Comparable Market Analysis of similar properties. Also, discussing dual agency up front with the owner, so he was privvy to the concept.

 

Some situations can be avoided, especially this one. Your thoughts?

 

...............................................................

 

Buying or selling a home in southern Utah? Call me at 435.632.9374 or contact me at wanda@buynsellutah.com to help because Wanda Can!

 

A portion of every successful real estate transaction goes to Bed 'n' Biscuits to help fund Switchpoint, a local homeless shelter.

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Looking for an experienced real estate professional in southern Utah? Click here.

 

To discover sunny southern Utah for yourself, go to: www.buynsellutah.com

 

Wanda Kubat-Nerdin REALTOR Southern Utah www.buynsellutah.com

 

 

Member of the St. George Area Chamber of Commerce

I, Wanda Kubat-Nerdin at PK Real Estate Utah am responsible for my opinions expressed in this blog. Information herein is deemed to be reliable but not guaranteed and may change due to market conditions. Please do not take my pictures or artwork and use them as your own, they are my property,  Copyright ©

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Topic:
Real Estate Sales and Marketing
Location:
Utah Washington County St. George
Groups:
Active Rain Newbies
ETHICS and the REALTOR
Agents who want REFERRALS!
Diary of a Realtor
Crap-Tacular
Tags:
comparable market analysis
listing agent responsibilities
pricing a home right
newbie real estate agents
putting the client first
pricing a home on the market
using care when taking a listing
consequences of actions

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Rainmaker
375,439
Greg Large
ERA Real Solutions - Grove City, OH
A Tradition of Trust

Appears multiple "Fail"s in this scenario, dual agency needs to be covered PRIOR to any offers and getting the Seller to understand comps don't lie, they are just the facts to base a realistic selling price.  Sounds like a breakdown of trust.

Feb 17, 2018 08:06 AM #25
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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

We're definitely seeing that here. This is a hot market.

Feb 17, 2018 08:41 AM #26
Rainmaker
231,653
Shirley Coomer
Keller Williams Realty Sonoran Living - Phoenix, AZ
Realtor, Keller Williams Realty, Phoenix Az

All listing presentations need to include education on the market and a review of comparative homes.  This helps the seller understand what similar homes are selling for.  Many sellers are emotionally attached to their home and a trained professional will lead them with facts.

Feb 17, 2018 09:09 AM #27
Rainmaker
851,029
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

The fad these days is priced lower than recent data. They often attract lots of traffic at first open house often the time to accept the offer. Sellers instruct to price what they have in mind. If desirable it is easy to get 10-20% over listed if not seller will accept the lone offer at most recent which is the wanted price.

Appraisal is not an issue here. Buyer released all contigiencies  except loan already at the time of making a offer. They should be able to foot the difference.  What about low down not strong buyers?  Too bad. The area is tailored for the strongest buyers.

Feb 17, 2018 09:17 AM #28
Rainmaker
1,101,523
Paula McDonald
Magnolia Realty ~ Granbury - Granbury, TX
Magnolia Realty ~ Granbury, TX 936-203-0279

Oh, don't even get me started. So many "fails" in this scenario. We must as professionals do our jobs with integrity and the right way.

Feb 17, 2018 10:14 AM #29
Rainmaker
976,901
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

Sadly, new (and poorly trained) agents make terrible mistakes. Yes, she learned from her mistake -  but the toll it took on the seller with the breach of fiduciary duty, plus the hit our industry takes regarding professionalism is huge.

Feb 17, 2018 10:46 AM #30
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Debb Janes EcoBroker and Bernie Stea JD, On unique properties, I call an appraiser to get some insight or recommend getting an appraisal ahead of time to the sellers. It is important to list a home to sell, not list to sit, then we know what happens there!  

Feb 17, 2018 12:36 PM #31
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Seller agreed with the price because he did not know current market value, only what the agent presented. Agent had to show market value to the buyers and they based the offer on lower amount comps. Inexperience and poor communication created the scenario Candice A. Donofrio!

Feb 17, 2018 12:51 PM #32
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

It does happen and could have been avoided Greg Large. It pays to ask for help when needed!

Feb 17, 2018 01:11 PM #33
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Yes, your market is definitely that Paul McFadden! Our son and daughter-in-law live in Oak Harbor.

Feb 17, 2018 01:12 PM #34
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Shirley Coomer, Most sellers have no idea what their home is worth. That is why it is so important for agents to get it right, whether in their favor or not!

Feb 17, 2018 01:15 PM #35
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Sounds like it is a strategy to get multiple offers Sam Shueh! I have seen that in this market as well and many times buyers go over appraisal value due to the high emotion.

Feb 17, 2018 01:16 PM #36
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Paula McDonald, We owe that to clients who depend on us to make the best decisions based on their wants and needs! 

Feb 17, 2018 01:17 PM #37
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Taking advantage of all resources to learn as much as possible when first starting out in a new industry while consulting with seasoned professionals makes all the difference in the world Margaret GossIt can keep us in business!

Feb 17, 2018 01:33 PM #38
Rainmaker
2,643,769
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

A common issue i face here is going to listing appoitments and other agents give higher prices to sellers to get the listing. I give real comps and real values and lose out. I see the homes it on the market too Wanda Kubat-Nerdin - Wanda Can! 

Feb 17, 2018 03:16 PM #39
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Sounds like the agent did not do a good job of informing the seller in the very beginning about the market, as compared to the price the seller wanted, whether he liked the reality of not.

Feb 17, 2018 04:20 PM #40
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Intentionally overpricing a home is to the advantage of no one really Scott Godzyk. Some may think so in the beginning and then the finger pointing begins!

Feb 17, 2018 05:27 PM #41
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

People new to the industry should reach out when in doubt Jeff Dowler. Less mistakes will happen and more trust occurs!

Feb 17, 2018 05:31 PM #42
Rainmaker
551,761
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

Where are you getting your information about what was discussed or not discussed with the seller?  Did they fire that agent and hire you? 

Feb 18, 2018 05:30 AM #43
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Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Tim Maitski, A tough lesson learned for a newbie when accuracy counts and no, I was not directly involved with this transaction. Our local Board offers classes on CMA's and new agents could use the valuable information.

Feb 18, 2018 07:25 AM #44
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