I couldn't believe my ears. Barbara Corcoran, The Today Show real estate expert, is talking in general terms again and it is so frustrating. She went on "national" tv and told people they needed to list their homes at 10-15% below their values in order to sell the homes fast. WHAT?!!
If you take the Dallas average of about $185k, that's like listing the house at $157k. Do you really think the person in this price range has that type of equity in their home to be able to sell it for at that price? Probably over 95% of buyers would be in the red just at the initial asking price, and that doesn't include the closing costs and realtor commisions they would still need to pay.
Take Dallas' median price of about $145k and work the numbers the same. Yes, someone would love to buy that $145k house for only $123k, but how does that seller have money to pay their closing costs and also make a down payment on their new home?
This is one of the most obsurd suggestions I've heard of for "national" information. Pricing and selling is still localized and the Dallas market is still going strong. Most of the suburbs are selling at 96-98% of their asking price. Why price it 15% low to get a quick offer at full price when you are leaving thousands of dollars on the table, and can still sell quickly if priced and staged properly?
Talk with a Realtor who specializes in the market in which you live and please don't take national information as the only way to meet your goals.
By the way, here is a link to the interview.
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?!
If you need to list it at 15% less than it's "worth" in order to sell it, then it's obviously not worth what you think that it is! :-)
Bob Mitchell
ValueList Real Estate Services, Inc.
I will admit...some of her advice was good...clutter as an example is an issue in many listings...but under pricing is not needed in hot or good markets. This again proves that all real estate is local...do not comment on a national basis...unless you sell in every market (which she of course does not).
Hi Donna ... I saw her this morning ... what a way to start the day!
Hey Donna. Yeah, I get so angry with her as well. I just turn the channel, she is so off base it is not even funny. She is just saying what see thinks she needs to say to get on TV; shame on her. Thanks for sharing, Jim
Donna, Barabara said, "10-15% below what you think it is worth." We all know home owners think there house is worth 25% more than market value. By making that statement she did you a favor. Now you only have to talk them down an additional 10-15%. LOL Have a great day.
Bob, I would agree.
Team DiMuria, Yes, but removing clutter is talked about all the time. Buying the middle priced home within a neighborhood is talked about all the time. Mostly common sense. As you said, there is no common sense in pricing so low in a good or hot market.
Marie, I know! I wanted to scream at her! She's even emailed me in the past asking my opinion about things in Dallas. I thought that was so cool, but I disagree with much of what she says.
Jim and Maria, I can't change the channel because I like to see the train reck!
Jimmy, Yes, she did say it that way, however, my examples for the Dallas prices would still hold up. Someone with a $140k house does not think it's worth $175k. They might think it's worth $150k, but that's barely 7% high.
This is happening in our market and what happens is that you receive a ton of attention and a bidding frenzy that leads the price to be drawn up to where it belongs.
I must admit I have used this tactic twice this year and it works great :)
Donna~ To some extent I can understand what she is saying, but like you said, real estate is LOCAL. She really should only be commenting in regards to her are, not everyone elses!
I don't even think its that bad in NYC...It's slowed down a bit, but things are selling - just not at the frenzied pace they were. But maybe a NYC person speak up. I'm in Westchester, people aren't pricing 10-15% below value. They are still getting good prices, though they usually have to come down a percent or two. My last sale, the seller came down about 3%. That's a LOOOONG way from 10-15%.
National real estate statements are no substitute for neighborhood statistics!
What part of Real Estate is a LOCAL market is she not understanding here ? Maybe in her neighborhood.. not across the country.
They should stick to general subjects like clutter and paint and leave the issues like pricing to the local experts. They leave the local weather to the hometown people don't they?
You so are right on! Newscasts like that are so frustrating. I saw that this morning as well and think, pretty much like everyone who has commented, keep it local.
In Michigan the average sales prices in many markets may hav dropped more than 15%. The sellers here have had to find a way to either come up with the money to bring to closing, stay or lose their home. It is a difficult reality we are dealing with. It is a great market for buyers and many 1st time home buyers are in heaven. it appearw we have hit bottom and may be on our way back. so move to michigan and take advantage of the low cost of living
How about listing your $185k house at 50% of the value.... $92,500 - I'm sure that would sell Real Quick!!!!! Real Esate is LOCAL, I don't know how they can give advice like that as each market varies.
Congrats on the feature!
You're right on the money. This is the most ridiculous type of news story because it's just someone one ignorant that's spouting off the mouth. In my county there are neighborhoods that are selling like hotcakes and the next city over you can't give them away. Real estate IS local.
Renee, That might be the theory, but does it happen to the extent that the sellers are will to accept? What if the offer is only $10k over the asking price? Do they reject the bidding war and start over?
Vickie, She doesn't have an area. I'm sure she used to, but she hasn't actually practiced real estate in quite a while.
Ruthmarie, I agree.
Norma, 100% correct!
Roland, Exactly!
Terry, Funny, but yes, they should talk about general information not specific information.
Terrie, Thank you.
Jeff, I've heard all the negative about Michigan for the past couple of years, but I never heard anything about Michigan having an appreciation bubble like other places. Did prices go up drastically for the current market to be the way it is?
Mike, Apparently you didn't see Barbara's report about a month ago where she said that if you aren't get a foreclosure at 50% off, you're getting a bad deal. I wanted to slap her through the TV on that episode as well!
Joe, I agree, thank you.
Hi Donna, There goes the media again, scaring the public! Thanks for sharing, I didn't catch that show!
Here's the link to the interview.
Yvette, I guess they think they can scare people into buying, but that just scares them away even more,
I can honestly say that I have never heard or read anything from any national media, tv, radio or national publication that in any way relates to my market area of Maryland and Northern Virginia.
It is incredible how sloppy journalism has become. They love the negative and don't check out the facts. I wonder how they distort information in areas where we don't know as much as we with regard to real estate.
Remember, it's not the media's job to report news or to educate...it's their job to sell ratings and newspapers. And what sells? Sensationlism. It's a total diservice to us as the general public, and leaves all of us running around making half-informed decisions about alot of things. Anytime you watch the news, or read the paper, keep that in mind while you are basing your opinions on whatever the topic is!!!!!
I want to put an offer on her home. I'll use her advice as my starting point for negotiations.
Just look at it this way, if she can sell lots of houses with all of her ideas what can we do? There is nothing wrong with thinking outside the box. Some of us can attempt things wrecklessly others cautiously but it is worth a shot to be creative.
I would like to have a house priced a bit lower and then have an open house receiving multiple offers followed by a bidding war but I think 10-15% is quite a bit too!
It sounds like another example of what the media thinks weill get the most attention, without considering reality. When you talk in generalities there is no real need to check your facts.
Jeff
Now we have Barbara Corcoron telling sellers to list 15% below market value, while others, in the media, are telling buyers to offer 40% below asking. Let's see - that would mean an offer of $510,000 on a million dollar house. Sound like the perfect scenerio for a lot of short sales. That should really help the real estate market!!
I sent an email to the Today Show expressing my outrage re: Corcoran's broadcast. I feel better even if my email does not accomplish anything.
I also sent an email to Barbara Corcoran.
I started to comment before listening to the interview...Im glad I actually listened to the interview rather than your post. You only quoted half of what she said. The advice was to price it low to encourage multiple offers and get a bidding war going; not price it low to sell it fast at full price. Renee Burrows has given you evidence that this tactic can work
And by the way, the sellers equity (or lack of it) has nothing to with market value. Neither does, what they need to pay off their mortgage or how much they could have gotten last year, or what their new house might cost, or what your commission is or any of that. Market value is what a ready, willing and able buyer will pay. And sometimes that means the seller has to come to the table with a check
Simply put, I try not to watch TV or read the paper these days...too much bad news or misinformation. Of course pricing is local...even my first grader knows that! :)
You price your home at the market price for your area. If you decide to price it 10-15% below then the sharks circle the water looking to make a kill.
Thats good advice for our market. Why price high in a declining market? Price slightly lower to save more now than lose more later.
I do agree though, everything is local and making broad statements on a National level is irresponsible but THAT is what sells. And the news want to sell.
But also look at the statements NAR has been making that makes us all look stupid.
Besides, if it is a different market in your area and your sellers were concerned that they may have to uudercut everyone else by that much and you come in and show them how you can save them that $ you'll be their hero.
She must be a real estate expert nationally and we didn't know it. Gotta love newcasters
Donna, well it all depends on the local market. That is one reason I hate hearing National Real Estate news. They haven't a clue, yse that is a bigger hit in area's where home prices are smaller.
Ouch, I really like Barbara. I've read her books and think she's really together, that's why she's on the Today show. It's too bad that reasonable advice doesn't make great news.
I wonder how many commenters on this thread actually to listed to Barbara's intereview???
Once again people in the media are talikng and not knowing what they are saying. Our market in Tucson, Az has been getting stronger the last few months. There is now 8.3 months on inventory and in January there was 13 months. Smart buyers are out there for sure.
Donna, Congrat on the feature! Houston is much like Dallas; we have been the tortoise as far as prices go but just like you we don't have those huge equities either. Real estate is local and the national media saying stuff like this is ridiculous.
Donna, you're right about it being ridiculous! Even those that don't work IN real estate would have a difficult time with an accurate opinion. Hellooooooooo, every market is so different. Even areas within our market. I just detest this type of television "reporting." ;-)
Congrats on the feature!
First of all, congrats on getting the post featured by AR. You are correct about real estate being local. I wish the national media outlets realize this before it is too late. I am seeing the media outlets doing this in my market area (Naperville real estate) as well. Thanks for the post!
That is good advice Donna. To make a blanket statement like that, is being irresponsible. People believe this and can give away money. Talk to a local Realtor, or 2 or 3, and make a selling decision based on their advice and your situation.
Donna, I agree 100%!
I had a listing client call me today practically in tears. She saw this report and is now convinced that her house will not sell for what she needs it to (which is a fair price based on comps and inventory). Forget about the financial disservice these reports do... let's consider the emotional stress and damage they cause unnecessarily.
It is so frustrating when you only hear the national view" of the real estate market --journalists (and I used that term loosely) should be required to add a disclaimer, that all local markets are different.
As for the pricing recommendation, I do agree that the sellers (in general) think that their home is worth 10 - 25% more than it actually is and so pricing it 10 - 15% less than that may actually get the home sold in a reasonable amount of time. I've actually had mulitple offers on several listings this year and we ended up selling the home for about 4 - 5% over asking price.
Donna well that discussion has been becoming more and more popular lately. Seems like a lot of Agents are getting frustrated and just settling for the quick dollar, its professionalism like yourself that outshines from the rest of the crowd. Remember everyone can be a critic but not everyone can be an expert :)
Real estate is different from one city to the next. never mind nationally. I agree that you can't just look at national trends except as a very broad generalization.
Donna, I was sort of surprised because in New York City, her market area, they are not exactly experiencing a declining market. Yikes!
I'm a "hard core real estate" realist when it comes to dealing with the consumer. We have a duty, under the law and under the COE to give the consumer accurate information about the market value of their property.
Then, it is up to the home owner to determine the list price based on their need to sell.
Once the home owner determines the desired list price for their property, it is up to the agent, based on projected time to sell and cost to carry the listing, to decide if they will accept the listing engagement.
It doesn't take a Rhodes Scholar to know that the lower you price, the sooner you will sell. That said, it is smart advice to price aggressively low in a declining market. Many of the homes sitting on the market today were overpriced a year ago. I've spoken to many home owners looking for advice who have been chasing the price down for over a year.
Donna: This makes me crazy watching this nonsense, too. I have written several posts about this, and have also comments many times when other Active Rainers write blog posts about how much the market sucks, or they quote some national article about how bad things are, and how values have dropped. That is one of the great things about the Fort Worth/Dallas real eatate market. We have had the luxury of gradual growth in our market prices for years and years... so we have not had the over-falued "bubble" form that has popped in so many other areas of the country.
We both know that all real estate is local, and most media types do not seem to be aware of that when they comment. But when I see other Realtors quote about how sucky the market is... they ought to know better... but for some reason they don't. Grrrr ! Thanks for sharing. By the way... you got your relo plans figured out yet ?
I missed the interview, but I agree she is totally off base. The market here is holding its on especially in the price ranges you mentioned. Its when you het up over $350k that houses are sitting on the market.
Perhaps real estate agents should be forbidden to appear on television. They always seem to step on it, don't they?
DONNA - I'm surprised that she would make a suggestion like this, and even more surprised that she uses sweeping generalizations to talk about the national real estate market, particularly because she made her name in NYC, where the market is very different than most places in the country. In fact, even during the recent lean years, the market in NYC has been rising. There may be places where pricing low is necessary (if the market is flooded with foreclosures), but this doesn't mean that this advice makes sense for everyone.
That would do it all right...or why not have a nuy one get one free sale...or a blue light special ? Geez....Maybe we should start an AR direct e-mail campaign and explain to her that real estate is local...her recipe for pricing would well fit the appetite of a short seller...other than that...oh not !
Hi Donna,
Barbara Corcoran sold her company to NRT more than five years ago. I missed the interview but I think she is promoting a new book. Having said that real estate practices are local.
Pricing low is a strategy that often works. However there is more to it than just pricing it low. There needs to be the right marketing to create a buzz about the property and getting many people to see it right away. In NYC it often works by listing it marketing it and then have the 1st showing at an Open House hoping to get 50 people at once. The idea is to bid it up because the buyers think it is a bargain. It is a risk and can back fire. But usually when it is priced lower it ends up getting a higher price then if it was originally priced high. Emotion, psychology, ego I guess.
In San Francisco they price every property low. Every buyer in SF is accustomed to bidding over the asking price. My friend a REALTOR in SF recently told me about a listing he had. He had an all cash offer above ask and the seller countered even higher. That would not work in NY unless there were multiple bidders.
Let's look at the potential positive outcome of her interview. Perhaps sellers will properly prepare their homes to sell and price them reasonably with the help of their local agents. That may help move some of the inventory, getting the backlog of homes off the market sooner. We still have sellers who refuse to accept reality and think their homes are worth what they were in 2005, so this type of interview may help those sellers see the light. On the other hand, I don't think many sellers would price their homes 10-15% below if they had their REALTOR showing them the reality of the market they are in locally. Sellers are typically overly optimistic if anything, few are willing to give their homes away no matter what a national "expert" may say.
If Barbara Corcoran is the voice of an "expert", no wonder NY is such a mess. I take everything she says with a grain of salt- this is an individual who was quite active in NY real estate, and we are about 20 years behind the rest of the country in terms of consumer practices. I'm wondering if she's EVER represented a buyer...but I do enjoy her "in your face" style in very small doses.
Donna,
Barbara Concaran gets payed to speak and in this very difficult real estate market she ran out of material except to speak in general terms. Local real estate dictates the price not Barbara.
Donna, this is why national TV is becoming known as the "drive-by" media. They flit from one subject to another, with no real understanding or depth.
Always remember this - national news media have an opinion and it may not be accurate, but they don't live in your area, so they really don't know, do they!!!!
I agree with you. Markets are local. Our market has a 92% list to sale ratio....but even at that if a house is priced right the ratio SHOULDN'T come in to play when the offer is being made. I am so tired of Realtors that give the tired speech when they present you with a low ball offer of list to sell ratios and what the seller paid for the house. You can not justify your offer that way. List to sell ratios have to do with pricing the house for MLS and what the seller gave for the house when he bought it is totally irrelevant. Those things do not tell you what the CURRENT MARKET is.
I just read Mitchell's comment- are you aware that, with Barbara presumably at the "helm" of Corcoran for years, there was no MLS participation until a few years ago? I wonder if the book is going to address Corcoran's lack of full exposure for sellers under her tenure, and practice of dual agency- that'll be an interesting read. Corcoran now uses the MLS (presumably under the NRT umbrella) on the North Fork, but had to create a separate entity so that they can still remain "exclusive" in the Hamptons- sort of like an Empress with no clothes, in my humble opinion. Hardly the one from whom I'd want real estate advice...OPINION.
Thanks for the post Donna.
Couldn't agree with you more. RE is very local & one cannot make generalizations like that.
I've found that it's only when you're in a position to know the truth that you realize how slanted and mostly inaccurate TV Reporting really is. She accomplished her goal though. Look how many times her name has been mentioned. Glad to see she finally got a makeover ;-) meow
My 2cents worth is that its just more propaganda.
Have we ever been able to fully trust the media???
We are in the business of completing transactions for our clients and giving both sides the best representation. TV experts are in the business of TV ratings. The "sky is falling" causes an emotional connection to that expert, Fear sells.
Hey great post! A nice way to remind us all that the general information deluge continues and we must do our part to inpart sanity and hard facts. I have taken a break from news watching ... now I remember why:-)
I disagree with your suggestion that the Today show made "one of the most obsurd suggestions ... for 'national' information." You see, while your local market in big ole Texas is holding value, in other local markets, such as Disney World Florida, market value has dropped by as much as 50%.
When TV shows cover "national" news, they're generally talking of averages, not straight statistics that apply across the board. National news is not a one-size-fits-all approach. It aims to ascertain common ground. In the midst of a housing crisis, that ground is in fact obsurdly reduced market values across much of the nation.
Nowadays Barbs is too far removed from the real world of Real Estate.
Like THE DONALD, there time has come and gone ages ago!!!
Yikes! I had no idea I was featured... I missed responding to many people's posts, and I apologize. Please know that I respect everyone's opinions. I wanted to comment on a couple of things. I understand pricing it low is supposed to create a buying frenzie, but as I had mentioned in a previous comment, what happens when someone does that in a market where it doesn't work? Is the seller "stuck" with accepting an offer $10k over their asking price though it's still thousands below where they need to sell?
And if she is reporting as "averages", I believe something in her comments should saying something like, "In many markets... blah blah blah." They way the reports on real estate news are talked about, they (the media) make it seem like it's the norm in every market. Smart, savvy people know you can't give blanket comments like this, but the "average" American takes everything they hear as the truth.
And to answer the question on Dallas vs Austin, we should know this week. Keep an eye out for a post.
Donna: I just watched the entire interview (thanks for the link) and I would have thought Matt Lauer would have had more sense than that. He just sat there... fawning over her, and just swallowed hard on everything she had to say. Start off 15% below market. That advice might be fine for some markets, or for short sales of homes the seller is about to lose, but to globalize recommendations like that, and then for Lauer to take them "as gospel" is just plain silly. I thought he was much more of a pro than that. Next time, Matt... do your homework !
Maybee If they pay in euro's the houses would be worth that much considering what the dollars worth or mabee their all wet and house prices are 50% underpriced because 0f our duetchdollars.