May
29
Overpricing Listings Is Real Estate Malpractice
Posted by Jonathan osman under For Sellers, General Information, Tips for Sellers
Last week, I received an offer for a home that I had listed earlier in the week in Charlotte North Carolina. The offer was acceptable to the seller and so pending a good inspection, we should have a rather quick closing which makes my clients very happy. This home wasn’t the cheapest home on the market or the only one for sale in the neighborhood. Buyers wanted this house because it looked good, was in the right location, and was priced right.
All too often, I see where sellers and agents alike use what I term as a SWAG price (slightly wild a$$ guess) when they first list their home for sale. I’m sure there are dozens of other terms that relate to the same thing but you get the idea. I can’t tell whether they are hoping the buyer never looks for comparable listings or if they are pricing with the aid of a dart board. In our market, there are far too many agents and sellers who are just…optimistic. Optimism is fine but it real estate it is costly.
The number one reason you want to be priced correctly from the start is that your home will be exposed first to those who are ready to buy. In every market, full-time agents like myself have dozens of buyers they are working with at a time who are looking for that perfect house. Every morning, they get emails from the MLS systems with the latest offerings and that may lead to a showing. If your home isn’t priced where it should have been from the beginning (and is ready to sell generally), you may miss one of those ready-to-move buyers. Once the ready to move crowd seen your house and rejected it, you’re now waiting for new buyers to come into the market and discover your home. Don’t necessarily think that a price reduction will do the trick either. It’s much harder to get a buyer back through the doors after they’ve said no once.

Think of it a like a job interview. Instead of showing up in a good looking suit, you go the extra mile and wear a tuxeudo and demanded $25,000 more than they were willing to pay for the position. They would most like think you were an absolute looney and dismiss you. Try to schedule a second interview and see how far that gets you.
In the last six months, I have blown away so many agents by showing and writing an offer
on the first day the house was listed. They are grateful, the buyer is getting a great deal, and the seller is pleased beyond compare. The reason is that we’ve seen all the overpriced listings on the market and they’re waitng for new and better. Your home can only be new and better once….twice if you hire a really good agent the second time around. So then why not have it ready to show for the ones who are the most qualified to buy your home?
Some sellers will make the choice of their agent solely based on the price they will list their house at. All they would need to do is ask to see the expired stats for that agent or the area to see how bad of an idea that is. If their average days on market is extraordinary, just assume that yours will be too.
The bottom line is sellers that in real estate, price really is everything. Therefore, don’t goof (yes, I know very eloquent) on the most important aspect of selling your home!

COMMENTS (7)
Well said Jonathan, this is a common mistake made by sellers and it's up to us to educate our clients. May 30, 2008 at 10:09 am
Thanks for the comments Becky. I meant it as much for sellers as for us. I'm blown away by the number of 200 day on market listings that have crept to be. Our market is great but there are hopeful sellers and wistful agents causing this trend. May 30, 2008 at 12:20 pm
Well stated! My partner and I don't don't take most listings we interview for because the sellers aren't realistic. June 8, 2008 at 9:04 pm
Hi Jonathan You are absolutly right, and as you said, sellers often go with the agent that promise or supports the highest price. We have lots of houses in our area that are still overpriced after one year on the market Anne Hensel, Broker June 19, 2008 at 9:38 pm
Jonathan, Excellent post, I had to laugh reading while reading it. Thank you, Stuart June 23, 2008 at 9:06 am
Hello, excellent site, very rich in content and correctly carefully thought out, personally I found here much interesting and useful Thankyou so much June 24, 2008 at 2:01 am
I like your 'Activity Level...Weeks on Market' chart. Is that local for your area or is it from some 'national' source? Your example of applying for a job in a tuxedo and demanding a higher salary frames the issue in terms that many sellers should be able to relate to. Thanks for your fresh approach to this ongoing issue! July 18, 2008 at 10:09 am