Howdy my friends and future customers. Today I want to write a little bit about proper pricing and what happens to your property if you don't get the pricing right, right from the get go. I wrote a post last August about a listing appointment I went on, it was titled "Counting the chickens before they hatch". This particular listing appointment came from one of my expired listing letters and I knew before I went that it was going to be difficult to get it priced properly. It was overpriced by about $65,000. You can read my prior post if you want more details.
Anyway, I thought I had the listing but after about a week of going back and forth on pricing and how much they were willing to pay me, I turned it down and they listed with another REALTOR®. This property was first placed on the market in March of 2006. The market was still pretty good back then in Poinciana Fl. And it would have been a good time to get the house sold. But unfortunately they were way too high on price and it just sat.
Now, when they met with me in August of 2006, there still would have been a very good chance of getting it sold. Of course in order for this to happen it would have needed to be priced right. The price I had suggested of $289,000 would have worked. How do I know? Well, I've been selling properties in Poinciana Fl for 13 years and have sold hundreds of homes, including three on their street. I'm an expert on pricing Poinciana real estate. The market was just starting the down turn in Poinciana and they were not going to get lucky. Getting it priced right was critical if they truly needed to sell. They chose not to take my advice. They re-listed at a higher price, than I had suggested, and with a REALTOR® who charges a couple of points less than I.
Let's take a look at the listing history. This will show you how they lost the pricing game. As of today, the property has been on the market for 16 months and counting.
So here we are, 16 months and three REALTORS® later, still on the market. Still trying to sell. And after $100,000 in price reductions.....still over priced. The market in Poinciana Fl has crashed and values have and are plummeting. This property MAY be worth $229,000 IF they get lucky.
Folks, does it get any clearer than this? If they would have priced it correctly from the get go this house would have sold a year ago for $40,000 more than where it is listed now. Chasing a declining market downward is a losing proposition. It will cost you thousands of dollars.
I hope this illustration sheds some light on the importance of proper pricing. You will NOT get lucky in a declining market. Contact an experienced REALTOR® and listen to what they have to say. Don't make me write a Blog post about your house! What say you?
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Blog Boy...
Too little? Too late? Or was it...Too Much? Too Late? Or was it...Too Little? Too Much?
Now see you have me all confused.
Don't make me write a blog or direct a video about this. LOL.
TLW...ROAR!
Hi Broker Beyonce:)
Maybe we need to get the moderators to feature the proper priced listings or have you show up in your wig and boobs.:)
Even some of my underpriced listings are not selling...lots of showings..no valid offers..mostly lower.
Bryant, you are preaching to the choir. Sellers chasing a down-ward market are in for it. I have a similiar situation going on where we are under contract for 397,200. They started 2 years ago at 525K. Truth be told it would have sold for 450 if they had priced it right. Sad isn't it? Sellers want to believe the Realtor that gives them the highest price. I"ve watched houses come down to below where I told them to price it.
Spectacular post BB...If they would only listen things would be so much better, but hey, what do we know, its only our Career.
Classic case of losing a lot of money while chasing the market. I know Sellers don't understand the concept and think we just want them to sell quickly to get our fee fast.. but overpricing always costs sellers money. One discount company .. who takes a flat fee upfront with no service offered... encourages overpricing by allowing sellers to pick their selling price and talking about all the money they will save by not using a full service broker.. Shame on them..
In this market overpricing may not only cost you cash but possibly your home ..
I dubbed her...
Blogging Bertha :)
She's my character so I get to name her. LOL.
TLW...ROAR!
You never had a chance. We have all seen this over and over again and none of us ever has a chance. The reason is that the Seller's know more than us. Just ask them. They are the experts and we are just getting a check for work that anyone could do.
Is that to cynical ?
Bryant,
Thanks for the post. Don't you just love the wisdom of the seller who has less experience than you in selling homes! Clearly, three Realtors later and the problem is still........................you got it..........the REALTORS.
Okay--it is Bubbles the Blogger or are you keeping us all on the fence?. By the way, nice post.
BB - This is a perfect example of why pricing correctly is key - I really hope people in your market and my market start reading and realizing that there are honest Realtors out there that want to help them and are not interested in "buying their listing". Too bad for those people.
And now I've been working with a buyer for the past three days (from Florida) who is insisting to put in offers on townhouses 30k below... because he's trying to beat the seller's in Hawaii.... and comparing to certain parts of Florida. And our market hasn't gone down...in fact, it went up in certain areas last month.
Go figure.....all I know is people need to get real, listen to their agent and stop playing around like they "know it all".
I love it! "Don't make me write a Blog post about your house!" Broker Bryant, as always your posts are thoughtful and insightful! Although the videos earlier in the week distrurbed ma . . . a lot . . . I will continue to read. :-)
BB: That is truly a sad story. It seems to be one that can't be told of too often...but continues to happen too often.
Jay
John...
Sorry you found that disturbing :)
Maybe I should stop dressing my husband up like a girl. Or not. LOL.
TLW...ROAR!
Below are some from my neighborhood. The DOMP is pretty long too.
List Sold Subsidy DOMP
$849,000.00 $725,000 97
$590,000.00 $506,000 103
$350,000.00 $260,000 $10,000 112
$651,000.00 $585,000 137
$989,900.00 $860,000 $5,000 189
$474,900.00 $415,000 $6,156 238
$649,000.00 $559,000 268
$455,000.00 $409,000 276
$859,999.00 $700,000 329
I have been recommending the Broker Bryant system of taking the listing on the third round. Of course, by then it might be ready for foreclosure.
True True True, This happens to so many sellers and they blame the realtor for everything.
Oh, okay---she has a name. Bertha. Fitting, I must admit. Opps, we're in a pricing bloo aren't we. Let me move on. Sorry.
Its hard to catch the train when it not only has left the station, but it is halfway to the next one. Testing a down market is a good way to fail. I have lost the last two listings I have tried for because I don't want to overprice. Ok by me, I don't want to spend the money on them. I want to sell property, not list it.
We're getting back to the market where you want to be
a man's first love
second wife
and third REALTOR®
Seriously, it really IS important to lead the market rather than follow it down. The sellers who followed my advice have sold and moved - and sold for more than the current market.
Why do people not understand? I had a guy tell me once I was just looking for an easy sale when I recommended a price. He went with someone else and had a scenario similar to this. 18 months and three Realtors later, the home went off the market. I am assuming it is a rental.
You can not chase the market when it is headed south.
Evening Bryan: When I am trying to explain this concept to customers I have them envision a stair step wherein they are always one step higher than the market. Some get it - some don't. Or don't want to get it. I give up !.
Well hello everyone!!!! I appreciate everyone stopping by and adding your thoughts to this post. Chasing the market downward is the surest way to failure in tihs market. We MUST make our sellers understand this. If not? Well find one that does. Listings are everywhere right now. But if they are not priced right they are a waste of time, mine and the sellers. I'd rather be blogging!!! :)
Just reading the history is painful... unfortunately, only too true.
Great illustration of the problems with pricing too high. Somehow we say this until we are blue in the face but they don't believe us. I have 2 still on the market with their 3rd and 4th Realtor...I would love to send them a letter later....Told you So!!! But I won't...
I am so glad I got to see you playing podcasts before I started mine LOL. How could anyone be "disturbed" by your videos. I have to admit I haven't watched the blonde wig ones yet. I didn't want to pee myself.
You are an amazing character. I can't wait to meet you some day.
Well, we've all seen it. Client prices home higher than agent suggests, same client turnins down an offer that is at a reasonable price, one year later the listing price is lower than the first offer, but now no one is writing offers. So very sad.
Fran
We've got a lot of sellers like this we can send to you, but that's not our real comment here.
We read what Ardell said above, watched your videos, and You and TLW are nuts. Just the kind we like. We should've figured it out from TLW's hat, then the BS bag..., we're new to AR kinda, but the videos confirmed it. It's great to see folks living out there on the edge, taking risks, being themselves, and having fun.
You get a 5 for the birdshot counter offer alone!
Cheers.., well, you don't need any.
I think this issue will go on as long as there are houses to sell. A lot of it really boils down to how effective we are in our market analysis and our ability to communicate same. Many Realtors miss getting listings because that's their focus instead of honestly addressing price, commitment to marketing strategy and the seller's needs.
Who are these Realtors who take these overpriced listings? Yes we have to be obedient to our princables wishes but thats after the agreement. To take such a listing and hide behind the obedience responsibility is a sham. These "Realtors" are looking out for themselves and prospecting for buyers.
SHAME
what is funny is in our market this information is available for years on the MLS - so even if they get wise later... the info will always be attached to the address - it shows them not to be real motivated... say they take it off the market and wait for a change in the market - then relist it.... a good agent here will pull the history.... and see all that - share it with the buyer - it could cost your $$$ even if the market changed.
I have been through this as well. They got what I told them they would. They went with a flat fee brokerage and it took forever to sell because they also overpriced. Always someone out there willing to take a listing they know is overpriced. What can we do? Sit and wait and hope they 'see the light'.
ps. Cant wait to see the next video!
I recently lost out on a listing where I told the people that their house was worth about $369,000. Another agent told them that it was worth $425,000. They pointed this out to me and I went through the comparables and told them that I couldn't justify that price. They ended up going with the other agent.
I was curious, so I kept an eye on this property as they lowered the price, lowered the price and lowered the price. It went pending at $365,ish. It pissed me off that the other agent b s ed them to get the listing and then beat them down to where they knew that it should have been in the first place.
Bob Mitchell
ValueList Real Estate Services, Inc.
I say hire Broker Bryant for Poinciana Sales. Great post BB. I agree with you completely, pricing to get the demand will pay off in the long run.
Well, did you sell a house this weekend? Or are you going to have to do a sequel to your hit video next weekend?
Just in case you didn't know... this post was featured in the Active Rain Week in Review 7/15/07-7/22/07, written by Toby Boyce. Congratulations!
AGREED! I guess some people just don't get it! We are clearly NOT in the Market we were in 2 years ago! good post BB
Bryant: Sad to say, I've had personal experiences with this...... I learnt my lesson well. I also think that it's not accurate to take past 6 mths stats anymore. It should be more like 30-45 days. How do you feel? My market is also rapidly changing.
Back in Nov 2006, we could never find houses over 3000 sq.ft. (1-2 yrs old in some newer communities) for less than $270K plus. Now, a ton of it around 215K - and about to go into foreclosures. These houses continue to sit in the market because they have no character....... Houses bought by investors....
Pricing is EVERYTHING - now what do we do to stop the competition from "buying" a listing from a seller by just telling them what they want to hear to get a signature. I see that alot. If you're going to be interviewed they the honest approach when it comes to the number..... have some INTEGRITY and get the listing on your own merits and not by overpricing it!!!!
Okay now I am done ranting.... thanks for a great topic!!!
Yes, this is very true, do things right from the get go, and the house will get sold.
Well hey there everyopne. Looks like I abandoned this post. Sorry about that. I was a little busy yesterday. My market is flooded with over priced listings. It could be as high as 50%!!! Of course the biggest problem in my market right now is nothing is selling at any price. Very difficult time to sell in Poinciana Fl. It just ain't happening.
I like the idea of being someones's First Love, Second Wife and Third Real Estate Agent!
Sellers right now, can't or just plain don't want to see into the future (we have to tell it like it is and show or help them see it), they think it is still 2005!
This is SOOO extremely important. I tried to explain this to some sellers, who called me, the other night.
They are about to expire with their current agent. I gave them a price that is can sell, 2 other agents gave them higher prices & told them that was better because 'the buyers can make offers'. How crazy is that?
So when they don't get any offers & the buyers that were looking while their house was over priced buy something else - they are left with more reductions after more reductions to get in line with other buyers.
They told me that my listings may be selling because I may be "under pricing' them.
Don't think so. If you had something under priced there would be multiple offers out the door.
What can you do? You can't help those that won't listen.
Very good - I run into this all too frequently!
Bryant, as I'm up in Lake Mary, I feel your pain. I still run into seller's every day who think the market IS what it WAS 2 years ago. They don't listen and it's almost amusing to check the MLS every now and then wondering what they've dropped it to now. I don't get it...I feel like so many people just want to pay a Realtor to be a yes man.
Bryant- We have a more stable market yet it still sucks. Our prices have to drop another 28% to reflect correct market values. We would have been fine if we had not lost billions of dollars from foreign investors who come here to buy vacation homes and with the new homeland security measures, even friendlies were not able to buy. But we have tons of foreclosures, not as many as the west coast of Florida but we had lots of wannabe investors wanting to flip and got caught in the bubble! Katerina
One of the communities I service has had some declines, nothing like that. I turned down a listing of a small home and we have seen a similar pattern with the agent who bought the listing for $40,000 more than it was worth. It is now $20,000 less than it should have sold for in the beginning.