Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Turning Down an Overpriced Listing

Turning Down an Overpriced Listing

I read a blog by James Gordon this morning about when you should turn down an overpriced listing and it reminded me of something that happened to me last month.

I received a call from an out of state seller who had a rental property on the market for 191 days, yes, I said 191.  During that time, the price was $104k.  People in other markets might think anyone would jump on this house and they're crazy not to.  However, I went and previewed the house, and ran comps, and the house comps out at about $92-95k.

At the time the sellers called me, they were still under a listing agreement, so I talked with them in generalizations about the area and said we would talk in more specifics when their listing expired, as the broker would not release the listing.  With all our talks, they knew I knew it was over priced, and the only way to generate activity was to get it below the $100k mark.  I mean, to be at $104k for 191 days with no price adjustments and about 1 showing a month, that should tell you something's wrong right there.

While we waited for their house to expire, they asked me to run comps on 6 of their other rentals that they wanted to sell as well.  I'm thining, WOW!  7 listings from one seller, this is GREAT!!  NOT!!!  The price ranages were from $50k up to about $100k.  Really bad houses in bad neighborhoods that I don't like to drive in, but I still sent them the information thinking they would all add up to a volume deal instead of just one listing at $50k.

Anyway, the first listing finally expires, and I spoke with the wife.  Mind you, most of the other conversations had been mostly with the husband (wife on speaker) and via email with the husband.  The wife was not happy with my final analysis that listing at $99k was pushing it and to sell it, we needed to be at least at $95k.  She said she would talk with  her husband.  I also followed up with an email to the husband.  He said he would sign the paperwork and send it back... a couple more days go by, and the husband says they've just been busy... a couple of more days... I check the MLS, and what do you know?

THEY LISTED THE HOUSE AT $104K WITH ANOTHER BROKER!!  Yes, I said $104k.  Again, it was already at $104 for 191 days.  So, I can see how they thought the strategy of listing it at $104k would help them this time.  The current listing has been on the market for 28 days already... at $95k, it would have lasted a week with my marketing!!

If these sellers BEGGED me to list their house to try it out at $104k, I would have very bluntly said no!  Why would another agent, after seeing it on the market for over 6 months list at the same price?  He must have been desperate for the listing.

Mr. and Mrs. Seller, if you're reading this, as I know you found me because of my blog, YOU'RE OVER PRICED and you're going to continue to make mortgage payments and pay taxes on a vacant house!!!

Comment balloon 22 commentsDonna Harris • June 06 2007 09:10AM

Comments

Great post Donna.

Why would they take the listing?????  

  • 1.  If they work in an office, they get to post it on the board and get smiles.
  • 2.  When they get it in the MLS, it might show in the IDX system and buyers might contact them.
  • 3.  They believe that the sellers will lower the price quickly.
  • 4.  They believe a cash buyer will come along and need a house quickly on that side of the block.
  • 5.  They believe in miracles.
Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 11 years ago

I've taken on the stand of being selective when it comes to taking listings.  I've come to the conclusion after dealing with unrealistic and somewhat uncooperative sellers.  They all say they want to sell their house but then they won't do what it takes to sell it.  If they "hire" a professional to get their house sold then why not let the professional do what they do? 

Posted by Venice Harris, Real Estate Agent - Conyers, GA (EXP Realty) over 11 years ago

6. They believe I'll loan them more money than the house is worth. (Hi Lenn, long time no 'see'.)

Venice ... they want to tell the lender how to write the loan, why not tell the agent how to sell the home? 

Posted by Ken Cook, Content Marketer/Creator (Content, coding, marketing, host.) over 11 years ago

Quite obviously, the new listing agent will have the property under contract when it comes time to lower the price.....

 

Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) over 11 years ago

The price wasn't why it didn't sell it was the agent, is what the sellers were probably thinking. At least you do not have to deal with it and when it expires again you might get the listing.

Posted by Greg Cremia (Shore Realty of the Outer Banks) over 11 years ago
That's just the type of seller you probably did not want anyway.  You will hear again from them in 60 days, upset that they did not list with you, and want your advice again.  It they are not serious about selling I dont want the listing.
Posted by Robert Walker (Remax) over 11 years ago

Hi Donna;
Great post.  Why did the other agent take the overprice listing you ask? simple, desperate for a listing and the seller was a better salesman than the agent.  Some sellers do not realize that you are interviewing them at the same time they are interviewing you.  You don't want to work with that type of seller anyway. 

John with Fort Lauderdale Fl Real Estate

Posted by John Sabia (Coldwell Banker) over 11 years ago

People are greedy, and as long as we have Realtors that will agree to take overpriced listings just to say that they have a listing, then this cycle will continue. It's a consequence that the true professional must continually face, and it's unfortunate that sellers must suffer the consequences.

Posted by Phil Malhao (Elite Legacy Realty Inc.) over 11 years ago

Donna, I certainly hope that the sellers do read this post.  Maybe seeing it in print with all of our comments will help them to understand how unreasonable they're being about the price. 

And if they come to their senses, I hope they come to you to list.

Posted by Jim & Maria Hart, Charleston, SC Real Estate (Brand Name Real Estate) over 11 years ago

It sounds like there is some lack of motivation on the part of the sellers, as well as being uninformed as to the local market conditions.

Posted by Patricia Greco (Hacienda Home Sales) over 11 years ago

Lenn- I would have to disagree with a couple of items, especially the one about thinking the sellers would lower their price.  It's been the same price for over 7 months now... I don't think there's a chance they'll be lowering it very soon.  Thanks for the rest, it was a good laugh as it's very true with so many agents!

Venice, I agree.  My job is to educate people about our market, and not allow them to g off things they've heard elsewhere... the husband listened, to an extent... but the wife is set on a number. 

Ken, with that thinking, you would think that the agent would have something in the comments about how the seller is willing to pay closing costs at this price, but nothing mentions it... they're just unrealistic.  I was going to say they're uneducated, but I educated them about the process and the market... they're bad listeners.

Tom, by the time they lower the price, the listing will be stale and showing about a year on the market!  It's not going to look good to the educated agent who pulls up the history of the listings... though educated agents are few and far between!!  ;)

Greg, Yes, they said over and over again that they felt the agent wasn't doing anything.  However, when I went to preview it, the agent had flags draped from the roof of the house down to the mailbox so people going by would notice. I even saw open house signs in the garage. She did "something" but the sellers probably don't understand why it's not selling because, again, they don't listen.  Also, I don't think I want the listing if they call me back... unless it's automatically listed UNDER $95k.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) over 11 years ago

Robert, I agree!  I no longer list houses that I can't sell!

John, I agree!  I actually was a little offended the first time I read your post thinking that you were also saying that I wasn't a good salesman by not being able to sell the realistic price to the sellers, however, I know that's not what you meant.  They'll realize they did another stupid thing when they get their next tax bill and pay taxes on a vacant home!

Phil, Yes, I agree.  And what's sad is if the house comp'd out at $190k and the seller listed for $200k, that's not very overpriced, and a buyer would still make an offer.  But in this lower price range, the $10k makes a HUGE difference.

Jim and Maria- I was thinking about forwarding them this link... too mean, huh? LOL!

Patricia, As I said, I tried to educate them as best as possible as I sent them several comps showing the activity.  They didn't want to hear it.  So sad...

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) over 11 years ago

Donna,

I had the same thing happen to me too... Turning down 7 listings in one day?  

Wow, same name same number of listings (freaky) Good for you I would have and did do the same.

 

Posted by Donna Lueder, Meridian Idaho Real Estate (Integrity Group Inc. ) over 11 years ago
Great post!  Yes I turn them down too!  i had one caller last year out of state from Michigan with 6 listings.  I told caller "Not interested!"  I also felt that fraud could be involved so I decided not to refer out either.  I did track the homes.  They listed with various agents around town... The homes also listed way above what I would list for.  5 of the 6 went into foreclosure and the other sold.  I cannot for the life of me figured out how it could appraise!  BTW.. just note for a laugh the code at the bottom of my post is "Lemon!"
Posted by Jim Crawford, Jim Crawford Atlanta Best Listing Agents & REALTOR (RE/MAX Paramount Properties) over 11 years ago

Donna, that is a very weird coinsidence!!  Lucky number 7 for me!

Jim, Thank you and Yes, this house is definitely a LEMON!!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) over 11 years ago
All I can do is shake my head.  Some people are optimistic and expect different results even though everthing else remains the same.
Posted by Debi Braulik, Selling Maple Valley to Fife WA Homes For Sale (www.roundrealestate.com) over 11 years ago
Debi, what's that saying that if you keep doing what you're doing, you're going to get the same results... I know that's not word for word, but basically the same thing.  All I can say is, I really hope they read this!!!
Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) over 11 years ago
Touche'
Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) over 11 years ago
We've let them go before, need to now, and will have more to pass on the the future. It's always hard, and necessary. Truth is the more that we stand up against unrealistic expectations, the better off our market as a whole becomes. Especially in a buyer driven market like ours right now in Lake Tahoe. 
Posted by Gary Bolen, CRS - Lake Tahoe Real Estate Information (McCall Realty) over 11 years ago

Hi, Donna!

I recently listed a townhome for a friend who is an investor and wanted to price the property above where we thought it should be listed.

We came to an agreement. We would list the property at his price for 3 weeks. If we had any feedback at all from showing agents that mentioned that it was overpriced, we would lower the price to my price. I even had him sign the post-dated price change form when he signed the listing agreement. (We use a web-based feedback system called 2 Get Feedback, which we like even better than homefeedback.com.)

Now, fortunately, we did not need to use the form - we received an offer and the property sold (may I please note that it sold for just under my suggested price?). However, I was more comfortable taking the listing because I knew it would not be overpriced forever.

I learned this little tactic at a Star Power Convention a couple of years back. It's the first time I actually used it, but I'm definitely keeping it in my arsenal!

~Maura Gebhardt

Posted by Maura Neill, North Metro Atlanta Real Estate (RE/MAX Around Atlanta) over 11 years ago
Some sellers are adamant about what their house is "worth" and they don't realize that it's not the agent dictating the price (after all, we'd prefer higher commissions by selling higher), but it is the buyers in the market who determine what a home will sell for.  I read another blog by Kristal Kraft that says that the third listing agent is the best one to be in situations like this.  In this case, that hits the nail right on the head.
Posted by Robin Willis, CDPE, SRES, Designated Broker (Tucson Expert Agents LLC) over 11 years ago
I just wanted to give an update that I just saw this listing has been reduced to $99,990 and it's still been on the market 50 days for this agent, so add that to the 191 days, they're sitting pretty at 241 days on the market!!  I just sit here and grin!
Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 11 years ago

Participate