There is a property in Rowlett, TX. I interviewed for the listing back in March 2006. At the appointment, we discussed many updates to the house that would need to be done in order to warrant top dollar. I told them that if they updated the kitchen, removed the wall paper, a few other things, along with allowing me to stage the property, a reasonable asking price would be $140k. I told them that if they did not do these updates and just listed the house in its present condition, it would sell for $125k tops, and that might be pushing it.
I followed up many times over the next several weeks to see how progress was coming along. Each time I spoke with them, they were very excited about the updates and couldn't wait to get it on the market. In July 2006, I got the call to come list it as they were ready... I walked in the door:
Me: I can't wait to see the kitchen!
Mrs. Seller: Oh, we didn't change the appliances.
Me: Ok, but at least it'll have a cleaner look with the wallpaper gone.
Mrs. Seller: No, we didn't take down the wall paper.
Me: Ohhh... What about the bathroms?
Mrs. Seller: No, we didn't change the flooring or anything there either.
Me: Ok, how about you tell me what you did do before I run through my list that we discussed.
Mr. Seller: (very proudly says) We recaulked the bathtubs!
Me: And?
Mrs Seller: That's it. We figured we could just sell it like this and the new buyer could do what they wanted...
Me: Well, you know that's going to effect the price we ask and how fast it's going to sell, remember?
Mrs. Seller: That's ok. We were thinking about $140-145k.
Me: We discussed $140k if you did the upgrades. We can't list it at $140k in this condition.
Mrs. Seller: But it was a former model home!
Me: But it's not a model home anymore. It has the original everything from early 1980!! $140k is not realistic.
I could go on... what happened here, is that I did finally agree to $140k with a $1500 allowance for the buyer, so that was basicaly $138,500. They also agreed to discuss a price adjustment after a couple of weeks depending on activity.
The sellers declined showings right and left, and refused to lower their price. I did finally get them to list at $137k but with the $1500 allowance removed, so they basically came down to $137k.
Where is that listing now?? Well, a couple of months after I listed it, my brokerage terminated the listing because they kept declining showings, and they also wouldn't allow me to stage it in order to show it to its best potentially, especially since it was overpriced, we needed to show the buyer why it was worth it.
It's now over a year later from my original listing, and it is STILL on the market!! It's with a different brokerage of course. Wanna know their initial starting price? $138k! Yes, they went UP from my last price adjustment. Wanna know what they're listed at now?? $133k with a $1500 allowance, which is basically $131,500.
At this point, even though it's only about $10k over priced, the listing is so stale, not many people are going to look at it. They ruined their chance of selling it because they sabataged their own efforts, and lack there of.
The lesson here, is do NOT overprice your listings just to test the market. Otherwise, you could be sitting there like these folks are, over a year later and no showing activity!!
Remember, I work all of North Dallas County and Collin County including Richardson, Plano, Allen, Frisco, Carrollton, Garland, Rowlett, McKinney, etc... my car will take us anywhere you need to go!!
ARE YOU PACKED YET?!
Painful lesson for everyone in the process.....
Jennifer, I typically won't overprice either. I did it for two reasons in this case. One, it was a co-worker of a good friend of mine. Two, they promised they would reduce it within 3 weeks... My friend is no longer friends with her because of how she treated me during the listing.
Scott, I agree, thank you.
Wayne & Lynda, I also agree. I've lost lots of listings because I wouldn't overprice them.
Loreena, There is one exception... if the sellers reduced it drastically and still on the market months (a year) later, the buyers might come back with a massive low-ball to see if the sellers are ready to just get rid of it. (BTW, I found another pregger on AR in our area due in Sept, and she wants to get together!)
I agree with Sharon,
People that insist on overpricing will stress you out and take up all your time. Better to let them know that you would gladly list their house AFTER they have tried with another agent at THEIR price. Call me if it doesn't work out! and then NEXT!
Michael, So true, so true. Thanks!
Sharon, I agree completely. It urks me when sellers don't care how much things cost cuz we'll get paid when it closes... well, if it never closeds, we never get paid!!
Debbie, I had not used that tactic before. I'll have to keep it in mind for the next one.
Ah,yes, let's put it on the market and see what we can get for it. If we get our pirce we'll move. Hmmm. Red flags from the very beginninI'd say. Thanks for sharing this story, Donna. Too bad they would not listen to you, or anyone else for that matter.
Jeff
It use to be a model home? Umm...well....every home was also a brand new home at one time.
Some people just never get it.
It "used" to be a model home. But "used to" and "now" are 2 different things.
Hey Donna!
Another lesson that you didn't mention... SKIP OVER THESE CLIENTS!
Yes it is their fault for not listening to you, but your fault for not listening to yourself and wasting your time.
I give my agents a goal to fire (or not getting hired) a client every 3-6 months. Nothing feels better than telling a client NO to an overpriced listing and see that listing sit, sit, sit and sit with a few other agents.
Now, ideally we would be able to explain the pitfalls, but if they won't listen, we must respect our own time and not waste it on these "just in case" the client comes to their senses and drops to a normal price. I just wrote an hour ago a blog where half of it could be replaced with "don't overprice": Reject THROW-UP listings. Do it "RIGHT," Not "RIGHT NOW!"
Donna, I have a listing here that is the SAME situation. Former model, lot of wallpaper. I asked them to remove it pre-list. They didn't want to. However, they did do all the other things I suggested.
Two months later, 20 showings and 98% of the feedback is TOO much wallpaper. They still won't remove it.
I am considering letting it go. Stubborn, stubborn. Mr. seller is already in CA. She is here with his mom and baby. Have you ever ??????????
Some sellers still do not get the picture
I give my seller 3 different prices when I get the listing
one --- if you really ant to sell now
two --- if you are not sure and you have 6 to 12 month time
three --- if you do not want to sell at all
and i constantly update them about solds in the area and compare their price to it
Jeff, Thank you!
Becky, Yeah, I laughed quite a bit at that one because she mentioned it several times. Even when I sent her the listing details with the description, she asked why I didn't mention it wasn't a formal model... I told her because it wasn't in model condition right now, and that we didn't want to disappoint buyers as soon as they walked in the door.
Michael, Thank you.
Diane, Yes, that's happening all over Dallas too, but most realize their mistake fairly quickly.
Bob & Carolin, I completely agree!
Christy, I don't "worry" about them, but I check up on the listing for a good laugh every now and then and also report back to my friend that it still hasn't sold. My friend whom she knew, listed her house, did everything I asked her to do, and it sold in 28 days!! Boy did she ever glote to this other seller, and it still didn't light a fire under her!
Frank, But, I couldn't really say no since it was a friend of a friend. I almost felt obligated as I didn't want to offend. In the end, I see that I should have walked away. It took me a little longer to fire her as I did when they kept declining showings.
Missy, I hate Wallpaper!! I had a listing a couple of years ago where I suggested removing the wallpaper. She was offended because she custom ordered that wallpaper and loved it. She kept it up. 30 days later, with all the feedback we were getting about how there was too much work to remove wallpaper and repaint so much, she called and asked if she should remove the wallpaper. I said, "You already know my answer." The wallpaper was removed, fresh paint went up, and the house sold a week later!!
Anne, I don't give multiple prices like that, mainly because if they have 6-12 months, then they shouldn't be putting the house on the market right now, and when they're ready, we can list at the "sell right now" price. Why would they want strangers walking through their house for so long. That would be annoying.
Yes this is the reality of over pricing, good post. We have all have had these types of Sellers who think a buyer would be willing to do the maintenance and updating work for a too high price and for too little of an allowance. Fiction is really stranger than the truth... On a listing I took 2 years ago, they wanted $279000 I told them they would not see $200,000. Surprise, that really made them mad at me, I cancelled the listing because they were not ready to hear the truth. I did not want to own the problem. It was then listed with another for $239000 for one year, no sale. It is now listed with a 3rd agent for $184,900 and still not sold going into the 3rd year. Now the market is down here, so their final selling price won't be pretty. Plus, they have built a new home and moved. The old home is empty and it has an immediately available rider on the sign. It is listed with an out of the area broker who is not close enough to properly service it, those sellers are my new neighbors and I avoid talking with them about their listing...LOL... but my evil side is vindicated.
Mary, I had a property like that 2 years ago!! I was the third agent and they had already tried selling for over a year already. They originally wanted $439k!! I told them it was worth about $315-320k. Since I already sold them a new house and had that money in my pocket, and again, they PROMISED they would reduce their price after 30 days, I listed it high for them at $389k. I did get them to lower it after 30 days, but not like they promised. They went only to $385k. I said good bye and good luck. Agent #4 comes in and lists at $366k... then $350k... after 14 more months on the market, it sold at $309k!!! It would have easily sold for $315-320k if they didn't have it on the market for almost 3 years and showing buyers they would be desperate for an offer. So frustrating...
Gary, I completely agree, thank you. Plus, houses sell themselves, we're just there to help instigate the situation and bring buyers and sellers together. If the house isn't going to sell itself, I can't force someone to buy it.
Sondra, I blogged about a situation like that a couple of weeks ago... asking $249k, under contract for $243k, appraised for $232k... Seller thought he lost a lot, but there was never enough value there to be his to lose.
Cristy, Thanks!
Laurie, Yes, I agree.
Great post Donna.
I can just see you having this conversation with the sellers and how frustrated you must have been. But obviously you were right and now a year later the house still sits. Sellers have to take control and be pro active if they are serious about selling. Maybe they could afford to sit?
In Miami where I lived, there was a house on the end of my block that had a for sale sign on it when we moved in. I remained there for almost 3 years! Why? The owner waaayyyy overpriced it "just to see what I could get" and wasn't really serious about selling. It was crazy! But, he wasn't a serious seller.
I wanted to post an update to this so I blogged about it here. It's two years later, and the house is STILL on the market!