I wonder if my plea will be heard...
Back in August I had a suggestion in this blog post "I have a cure for the housing market but I need your help" which stated that every realtor and seller (including FSBOs) should immediately withdrawl their listings that would knowingly never sell. If that did happen, probably at least 10 percent of the inventory would be cleared ! That in and of itself would be a great stimulus to the housing market !
As an add-on to that post, my next plea is simple and straightfoward. Please Please Please do not take the overpriced listings - it confuses the sellers (and realtors as well as the public) in the neigborhood and it wastes everyones time. We are all better served by having realistic priced homes on the market as the inventory will begin to move and take some of the sting out of the sluggish marketplace.
A couple of examples and I'm sure you will have many more but case in point:
1. TIME WASTING
There was a Fishtown home that was about to expire approximately 6 months ago that was listed at $240K. I told the seller the max listing price I would do was $199,900 as his sales price really would be around $185K. He re-listed with his current realtor and then later listed with someone else at that higher number. This is a perfect example of how time will end up being wasted.
So this week, an agent from my team writes an offer on this property: you would think the seller should be celebrating ! Buyers agent writes a deal for $185,000 (a gift because it would be the high price range for this area). The seller wanted to straight-out reject this offer but did come back with a counter of only $2K below his listing price of $215K. Deal dies - buyers agent writes a deal for another property. What we should look at closely here is how much time is being wasted by buyer agents and consumers (not to mention the listing agents fielding calls and marketing the property). Even in the unlikely possibility that this seller finds a qualified buyer to write a deal for what he wants "to break even" the house will not appraise by the bank ! That would be a waste of time of another industry ! So for plea number 1, let's stop wasting time. My suggestion would be to recommend these sellers to rent the property or sell and take a tax loss !
2. CONFUSION
Agents and sellers who list overpriced homes confuse the consumers. One mindset that a seller has which becomes a trap is their fear that they are "giving it away" because the one down the street is listed for so much more.
I would like to say that most of this consufsion can be overcome by an experienced agent but sadly, and more often than not, it cannot. With all the overpriced inventory, it is very hard to convince a person of the truth. These high listing numbers can be very persuasive to a seller with high hopes. Rumors and undocumented values can fly from everywhere for what a house sells for which may not be the truth. As a result, you get a real estate market filled with listings that are inflated and consumers questioning realtors who are actually giving sound advice.
Plea number 2: PLEASE do not be part of the CONFUSION, be part of the solution ! Price and list the properties accordingly.
Price your listings accordingly and be firm and communicate with a potential seller. I subscribe that there is nothing wrong with being a little high in the beginning (heck I do not have a crystal ball) as long as a seller initially agrees to a strategy of price reductions. I have been doing price reductions based on both (1) days on market and (2) number of showings so whatever happens first can then allow for a predetermined price reduction !
Let's work together and sell some properties !
My question is... Consumers, agents, tell me - what are your thoughts ? Overpriced listings, should we take them or should we leave them ?
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The Somers - Philadelphia Real Estate
The Philadelphia Real Estate Blog
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