There are scores of listings languishing on the market here in the greater Phoenix area. Thousands upon thousands of them. Many are overpriced. Many are in less than ideal condition. Many more are simply “okay” houses with “okay” prices. That won’t cut it in today’s hyper competitive environment. While these home selling sins are somewhat pardonable due to financial constraints, I still run across the occasional animal that should have gone extinct right next to the dodo bird … or 2006, at the latest.
I’m talking about the “Exclusive Listing.”
In better times for sellers, the exclusive listing is often wielded by a listing agent who wants to keep the whole commission pie to him/herself. Knowing that a property often sold before a sign was even planted in the yard, more and more agents began to horde their listings between 2004-2006. They didn’t want to pay a buyer’s agent because buyers were a dime a dozen.
You also had the sellers who thought they could save a few bucks by negotiating a slightly reduced commission by employing one agent to handle the transaction, and cutting out the perceived middle man (buyer’s agent). This was folly, of course, because it greatly reduced the pool of buyers coming through the front door. Reduced demand from potential suitors equals a reduced sales price. But even though the practice was of the “penny wise, pound foolish” variety, many such listings would still sell in the frenzy that defined 2005 Scottsdale.
Now it’s 2008. Instead of buyers mugging each other in the mad scramble to submit an offer on a property, any property, they are turning their noses up at the most pristine and reasonably priced homes on the market. Sellers are offering closing cost assistance, private financing, cars, vacations, agent bonuses and an evening with their wives to entice leery buyers … okay, maybe not the last one.
This being said, it was downright confounding when I occasioned upon one such relic from the glory days. Surfing a few websites this morning for properties that may not have hit the MLS yet, I stumbled across something that looked like a perfect fit for my client. As I was reading the description, I began to get excited. Mid-century modern construction with a contemporary flair in central Phoenix? This might be the ticket! Scrolling further down the page, I saw it.
“Exclusive Listing – Not in MLS!”
My initial ire faded to wonder. I stared at the antiquated words on my screen as I would the wildlife in the Galapagos Islands. Afraid to move for fear of spooking the endangered little creature, I picked up my phone ever so slowly. I dialed the listing agent. In hushed tones, I left a message requesting further information, and punctuated the call with the words, “You’re not really keeping a listing in-house in this market, are you???” My next three calls went to associates. I couldn’t wait to tell them that I had stumbled upon the Real Estate equivalent of a unicorn.
They do exist!
As I wait for the return phone call which will never come (prompting me to put the agent on speed dial), I sit transfixed by the sheer audacity. I’m dying to know if this exclusivity was the brainchild of the agent or the client.
“Hey, I’ve got an idea! Let’s make a property even more impossible to sell in this market!”
“Sounds great!”
“Just think of the money I’ll save!”
“Me too!”
Tell you what, fellas. Don't take all of those "savings" to the casino until you actually produce a sale for market value. Of course, if you are fortunate enough to procure a buyer, how will you know if you attain market value? You haven't tapped into the largest pool of buyers to test demand.
I have seen a few harebrained schemes in my day, but the exclusive listing is right up there with the best of them. Its only rival is the "home viewing allowed upon accepted contract only" listing.
Good grief. The things people do to themselves.
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