For a few weeks, maybe two months, I've been showing for-sale homes to a young client of mine. She's an advanced-degreed professional, single, and this will be the first home she'll own.
The criteria is this: 2 to 3 bedrooms, 2 baths, not too far from Parkland Hospital, a nice backyard where she and her friends can barbecue and visit under the stars. The price shouldn't exceed $170,000.
I thought this would be an easy adventure since there is so much product on the market, and there aren't a lot of buyers. Prices should be more reasonable and sellers would have their homes spit-polished so they would standout among the crowd.
For the most part, that hasn't been the case. Worse than the error of overpricing is the lack of understanding the rules of presentation. We've seen home after home -- even those that are vacant -- that are full of debris, roof damage, serious foundation settling, exposed electrical wires, poor handyman work, attempts to cover wood rot with Bondo rather than fix the cause and repair the results.
One looked promising, although it would require some heavy-duty upgrading just to be satisfactory. We did our value research, and determined that the asking price was $20,000 too high. Without revealing our evaluation, I asked a lender friend to see what his appraiser thought. Yep, he agreed with us that it was about $20,000 over-priced.
We turned in our contract. We gave the seller four days to respond. We didn't hear anything by our deadline. Three days after that came an email. "My client's not ready to give the house away." Three days later, we got a notice that had been sent to all who had shown the home, that the price had been lowered by $10,000. Still not enough, so we're not interested.
But then last Sunday, we toured a home that was in good repair, clean and neat, had been staged by the sellers and the agent had priced it correctly. It had been on the market for four days. There were two other parties waiting to see the home as we were leaving. By nightfall, the home had been optioned.
BILL CHERRY, REALTORS
DALLAS - HIGHLAND PARK
214 503-8563
There is a basic flaw in the practices of many listing agents. IF they understand "value research", (love that term, I may borrow it), they present the price range to the seller. If the seller then insists on a significantly higher list price that puts the property out of range for selling, the agent should refuse the listing.
Otherwise, we'll just keep going around and around to the road to nowhere.
Do we know our business? Or, are we pawns in the hands of sellers who do NOT know our business?
Hi Bill, I have been running into the same thing here. However, instead of lowering the price of the home, the agent actually canceled the listing and put it on as a new listing, with a different picture as the main photo. I wonder did the agent think we wouldn't know? Oh well.
Today we are going back to a home for a second look, and I do believe this is the one.
I could say more, but I won't. This is YOUR RANT!
Not much over priced here, well a few things. But back when we were in transition I saw it too. Not worth my time, I like being agent number 2 or 3 to sell.
Hello Bill:
I think and know some people are still back in 1999 to 2005 mode and anything you say or do won't convince them otherwise. Other people think that everyone likes the same taste in decor that they do and won't change it for nothing. Glad to hear you did find something for your client. Could keep on going but I understand your point.
I am with Missy here in Ohio if it is over priced here it sits and sits. #2 agent usually gets it right.
MORNING BILL! More than there should be. --Gabrielle
Buying a listing is a bad thing....and realtors who still do it, don't get it...don't get the sale Or their money back for investing in a listing at a price that is not appraisable.
Hi Bill:
(Worse than the error of overpricing is the lack of understanding the rules of presentation.)
If a house is over priced in this market better for you the buyer's agent to make a good deal. As a buyer's agent I am a negotiator. Better for me if the home is overpriced because that means I won't have any competition when it comes to putting in a contract.
I can get my price without worrying everyone else want's the deal. It's the best time to put in a contract.
Present the contract to the seller with the facts. You never know what someone will take for the home until you present the offer. Why have a buyer's agent if they don't know how to negotiate. Maybe you don't get it. Get out there and present offers with facts and get the deal. Blaming others doesn't make you successful.
The other side of the coin: House is price right. so what, as a buyer's agent you still negotiate to bring the price down for your buyer. I would never give a seller 4 days to think about an offer. Try 24 or 48 hours depending on the situation.
Thanks Bill, I love your post. All true. Many sellers and even their agents just are not facing the reality of today's market
No matter what the market is doing, well priced homes that are attractively presented will sell! I see the same thing here in Austin all the time!
Hi Bill... You are right on target with this one. Homes that are priced properly (and especially those that show well) are selling quickly in this market. It's not a hard concept to grasp, yet many sellers (and sometimes their agents) can't accept it.
There are bad realotrs just like there are bad ... whatevers in any profession. What makes ours especially tough right now is the market. Coupling a bad realtor with a tough market can be very trying
Good morning Bill!
Sadly, many sellers tend to blame their agents when their house doesn't sell.....they don't like to heed the agent's advice that it's overpriced and sometimes think that switching agents will help sell it. ~Then, down the road, they end up selling it for far less than they could have if it had of been priced right to begin with.
There are many overpriced listings in this area right now and they are sitting.....it seems either the agents aren't doing proper CMAs or their clients aren't really motivated to sell.
Jo
Hi Bill!
Haven't heard from you for a while...I hope you were either busy or having fun! I have the same issue here. I am amazed when I go into a house that, by the price, should be stellar...only to find out someone was on something when they price it! There is no excuse for a dirty house. Even if they can't afford to do anything else, they can clean it. Oh well...this gives us an excuse to show how really good we are when ours sell and the others don't.
Sad, but it seems like a carryover from "the good ole days"...that happen to be the not-so-distant past. Up until July 2007, realtors could have probably gotten away with that disregard for the state of their listings pretty much unchecked. It takes time for reality to set in, just as it takes a while to teach an old dog new tricks...or tricks of any kind, for that matter.
Keep on--if people aren't willing to deal, you can't make 'em (sadly).
Hi Bill,
My question would be why to even show the house which was not in the price range? Not showing this house would save a lot of aggravation.
Eva
All of you have made excellent contributions to this post.
Thanks,
Bill Cherry
Hi Bill,I hope your client submitted the accepted offer.