Wade Corbett
By Wade Corbett
How much time do you spend time researching and creating comparables for properties that you aspire to list? You then sit down with the homeowners and they have decided—in their infinite wisdom—that you should list it at a higher price than you suggested. What do you do?
Many agents will say, “Sure! Let’s list it at your price and we’ll see if it sells!” After all, we’re just happy to just add another listing to our portfolio, right? Many months later, the home is still on the market and the same sellers are questioning your ability to do your job. How many of us have shot ourselves in the foot this way?
Thankfully, there are some easy ways to avoid this situation:
- I don’t LIST properties, I SELL them. I frequently tell my clients that I’m not in the business of listing their home. It reflects poorly on all of us when we can’t provide the results that we promise in that first meeting. Explain to them that they are better off seeing activity than no activity. Eliminate that “negotiation cushion price” that sellers love. This is when sellers price their home significantly higher than they actually want to sell it for. I tell my sellers that they can always decline an offer that they don’t like, but they can’t decline that offer if there’s no activity on their listing. I’d rather they received five offers they didn’t like than zero offers because the price scared people away.
- We’ll do it your way, and then we’ll try my way. In some cases, I’ll meet halfway a seller who firmly believes that their home is worth significantly more than the market suggests. In these cases, I’ll offer a compromise that typically works: “Why don’t we list it at your price for a short time, and if we don’t see significant interest from buyers, we’ll reduce it to my suggested price?” This method works really well, because it gives the seller a chance to test the market at a higher price but also leaves the door open to reduce if needed. Remind the seller that your goal is to sell the house at the highest price possible.
- Turn away. Sometimes we have to turn down overpriced listings. Do you really want to put time, energy, and money into researching, measuring, taking pictures, and marketing a home that might not generate any interest? Do you really want to explain in six months why you couldn’t do your job and get a property sold?
All of these methods will make your job much easier when selling a home that might be overpriced. Of course, you’re going to have homes that sell fast and some that take time, even at the right price. The important thing is to be proactive in the beginning; that will make your job easier in the end. Always serve your clients’ best interests first, but don’t let anyone dictate to you how you should run your business.
Wade Corbett is a REALTOR® with RE/MAX Southland Realty in Garner, North Carolina. Connect with him at WadeCorbett.com or facebook.com/WadeCorbettInc.
Comments 13
Great article! I love your very first tip, I might have to use that saying! Very helpful article.
as a first year realtor/broker it’s nice to know that being pressured into taking a listing b/c you so desperately want one is not the only option. I like your #1 and will have to remember that when sellers come at me with their plethora of reasons as to why it’s obviously worth much more than I’m suggesting…
Pingback: Hitting the Sweet Spot: Seller/Listing Agent Pricing of a Home | real{estate}
Pingback: Hitting the Sweet Spot: Seller/Listing Agent Pricing of a Home | Real Estate in Bozeman
Wade, you are right on. Agents/Brokers forget what their time and energy is worth. A lot of agents will take over price listing just to get the listing so they can go back and get the seller to reduce their price. I’ve seen this for over 30 years in my business. When I take a listing, I explain that if your looking for an agent to give you the price you want and the amount of commission you want to be charged to take a listing that this is the biggest two mistakes that any seller would make. We need to be honest with our sellers not take over price turkeys (OPT). Good luck with your sellers, turn down the listing if it does not make good business sense, or refer this seller to some other FIRM.
The problem with number 2 is that the Seller reconsiders and doesn’t want to reduce it as agreed! If number 1 doesn’t work, walk away! It will save you both the headache of having an overpriced listing!
Wade, you are right on the money. Overpriced listings will drain the life out of you!! Sure, you will lose a few but what you gain is more precious. Price them right and they will sell. Always good to hear a great message like this. Thank you!
I just tried this technique with a Seller and told her that I would be lying to her if I thought I could sell it at that price (her price). In addition, I wouldn’t be doing my job if I wasn’t realistic and honest with her. I also mentioned that if she wants to shop around for another realtor I’d be happy to take her back when it doesn’t sell. She liked that, and is listing with me.
SPOT ON buddy. Truer words have never been spoken…well maybe they have, but this is great stuff here. Cheers!
Vance
There is a 4th option — advise the seller to get an appraisal from a competent, well-respected appraiser to help set the asking price. A good appraiser can do much more than establish a credible, unbiased opinion of value. A good appraiser can also include comparisons with competing listings, an analysis of selling prices as a percentage of most recent listing prices, information about typical sales concessions in the local market, supply/demand conditions that may affect the property’s marketing and sale, market value trends, and the actual marketing history of competing sales and listings.
Also, you may advise the seller that the analysis and conclusions in the appraisal may not be divulged to potential purchasers unless authorized by the appraiser’s client (the seller) to do so, because the ethics provisions of the Uniform Standards of Professional Appraisal Practice (USPAP) requires the appraiser to guard the confidentiality of the appraiser-client relationship. Of course there is some cost to the appraisal, but the cost of the appraisal is small compared with the potential cost in asking an inappropriately high or low listing price. Of course the seller should also be advised to select the appraiser based on their competence and reputation rather than seeking the cheapest fee, because in appraisals as with many other services and products, you usually get what you pay for.
I frequently use #2, but at the time they sign the listing, I also have them sign a Change of Status form that reduces the price to my recommended price 30 days later if no offers have been received.
All three of Wade’s comments are played out all too frequently in today’s marketplace, especially in the inventory-scarce Phoenix Metro area. Most realtors are looking for those “nuggets of gold” called listings. The temptation is to say nothing and let the over-priced listing take its normal appreciation course. Without incorporating any/all three points in the article, those overpriced under-attended listings will probably come back to haunt you and end up in the lap of your fellow competitor six months down the line, ready to sell under a more upfront agent.
These are great suggestions and I know they work. There is also the power in showing the CMA and how you determined the listing price you are suggesting…. then ask them WHY they think their house is worth so much more than houses than the com-parables. You must be very diplomatic when doing this. If done correctly the seller
will soon realize that there is no reason that their house is worth more.