It seems that many Sellers are living on Fantasy Island. What's more - they have managed to convince supposedly "professional" real estate agents to move there with them! (Click the graphic on the left for video)
I continue to be amazed by the number of overpriced listings - and I mean overpriced to the point where there is absolutely no justification or reason for the list price except that's what the Seller wanted to list it for.
It takes two - perhaps three - to create these listings. The Owner / Seller, the Listing Agent, and the Listing Broker who blesses it.
Why would the three of them do such a thing?
Is it a "Hail Mary" football pass hoping that lightning will strike?
Is it that the Listing Agent will take a listing at any price just to have inventory to hold Open Houses in search of unrepresented Buyers?
In this market - make that in ANY market - we have a fiduciary responsibility to our clients. I don't see how participating in their pricing fantasy is fulfilling that responsibility to them. Perhaps I'm overlooking something when I'm looking for the "Win-Win".
It doesn't matter what price the Seller "wants" - the market will bear what the market will bear.
It doesn't matter what price the Seller "needs" - the market will bear what the market will bear.
If the Seller MUST sell, they will receive Market Price for their property. On the HUD1 it will either show an amount as "proceeds to Seller" or "amount due from Seller". If the Seller doesn't have the "amount due from Seller" that's called (at best) a Short Sale and requires lender cooperation.
Win - Win = Priced for the market, property sells, Seller and Broker meet objective of getting the property sold.
Lose - Lose = Priced at Fantasy Island pricing, property fails to sell, Seller disgruntled, Broker out of pocket time, money and effort. A waste.
Let some other "professional" buy the listing - and get on with taking saleable listings priced realistically for the market.
Am I missing something??
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"The Seller Sets the Price of the HOUSE but the Market Determines the Value". That is one of the pieces of marketing materials I send out prior to meeting them in my pre-list packet.
Missy - What technique(s) do you use to explain reality pricing to the Seller?
Tony - We don't even have palm trees here and sellers still think Fantasy Island when pricing. Great Photos!
Excellent post Tony!! Last weekend I walked away from a listing because it was overpriced and the seller was not making any attempt to sell it. I finally asked him last week, "Do you want to own your home or sell it?" That was powerful for me!! I have to be honest with you, I took the listing knowing it was overpriced, I told the seller that also. However, it took me 3 months to realize that I was not going to help this seller with this sale if he wasn't going to lower the price!!
I love your posts!! Thanks for writing!!
Tony,
I have a few listings from the stone age and the seller's won't budge on price, they still want to use me as their agent, but I don't see any hope of selling their properties at the present price. I have diligently presented date over the listing period showing market value. What to do?
Fran
Avoid the fantasy. NEXT. Stick with the realistic ones. If at some point there aren't any - go on vacation.
Great point. The biggest expense in the business is expired listings. The biggest reason listings expire is price.
We have it here too - I frankly I just don't get it. I really think it's too many inexperience agents who haven't had a single sale and have maybe 1 or 2 listings. They just plain don't realize they are in control!
Fun and very blunt post. I've bookmarked it to emphasize my point on listing appontments!
Love your post Tony. Especially the one with the Nintendo Guy. Great stuff. Let's buy a seaplane (since you and I have a pilot's license) and take all the unreasonable buyers to our own fantasy island and do a seminar.
Ken
You make an excellent point Tony! I have asked several other agents why they have taken overpriced listings. They usually say they did it with the idea that they will get the seller to make price reductions when it sits for a while and they can provide some "feedback". From what I have seen though, this usually just ends up with a cancelled or expired listing. I think we all need to be honest with our sellers up front, even if it isn't what they want to hear.
I totally agree about everyone thinking their home is worth so much more than it is. I get appraisals that come in low all the time and owners get upset at me that their home isnt worth what they think it is. Its NOT a bad appraisal!!! People have to understand that you can have 33% appreciation forever!! Values are back to where they are suppose to be and not so inflated. Just hang in there and when the rain clouds leave us, we will be sitting pretty!!
Wonderful post! I'm new at this and don't have the slightest idea of how to add all the pics and subscribe to click you've got, maybe I'll learn. I was born and raised in Scottsdale so I know your area well and visit it often. Now a Tennessee Girl!