I just received a call from one of my market mailers. The gentleman lives in a neighborhood I actively farm. It is located in Pembroke Pines Florida. Just to let you know ....I lived there myself for 7 years and I know the area pretty well.
He called to tell me he was thinking of putting his home on the market. I started the conversation off by finding out what his current situation was and asked him what model he had. I also asked him when I could drop by and see the home. He told me he was unable to meet with me during the week....only on the weekend. I told him that I had a cancellation for Sunday and he told me he was too busy and that it would have to wait until the following weekend.
Before we went any further he asked me "how much do you guys charge?"I told him I usually do not discuss commission over the phone and I suggested we meet in person. I really need to see the home,the location and the condition before I could determine anything else. He became reluctant when I wouldn't give him the answer he was looking for. I decided to continue this conversation further by asking him "what exactly were you thinking of paying a full service Realtor(R) who has been doing this for almost 12 yrs." His answer was "Neal...I want to net $410,000 so whatever you get over that number will be what I will pay you". I guess he wasn't worried that the appraisal would not be an issue...yet he is asking me my opinion on what I thought the house should be priced at.
My answer to him was "well if my main objective is to get your home sold and you the best possible price in the least amount of time and with the least amount of convenience to you then if I brought you an offer of $411,000 and you accept it...does that mean you will only pay me $1,000 even if I invest my time and money and it takes 6-12 months to get it sold?" He said yes. I told him honestly if he was looking just to throw his listing on the MLS and do nothing else then I would take out my different level of services menu and work from that. I just simply refuse to take any additional over priced listings and in todays market it is important to price you home right.
I explained that most Realtors(R) are getting X amount but others are actually getting more just as an incentive for them to show properties. I'm not going to take a listing without any commitment to me and if it is not priced right then I refuse to take it just to babysit. Sellers need to ask themselves whether they want to own it or sell it.
Let's face it..most sellers want to know to main things...how much they are going to make and how much we are going to make.
I mentioned that I receive calls from many top Realtors(R) that will show my listings because of the compensation that is offered. He let it be known that he didn't have to sell but if a buyer was willing to pay his price he would listen to the offer. I started to think about that remark he made and that I haven't heard that saying in a long time. "Good luck to him."
Most of them have to spend countless hours and mileage showing 30-40 homes before getting the buyer to actually make that offer. He needed to get the most out of his listing and he would get that benefit from my aggressive advertising along with the exposure of the cooperating Realtors(R) want to show his property. I wrote a post a while back that explains my recipe for success in this market. Even now it's very hard to find buyers with the saturated inventory we are experiencing.
I ended the conversation by wishing him luck and he said if things changed then he would give me a call
I would appreciate it if you would
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Neal - You did the RIGHT thing! I wish more agents would take this stance, if they did, market conditions would improve very quickly. A large percentage of listings taken each day are overpriced and the sellers don't really need to sell! That's one of the reasons we're where were at.
Great way to handle that situation. If they don't need to sell, then don't. If they don't understand the value we bring to the table, then they won't be easy to work with. Who needs and overpriced listing. They only drain your resources and ruin your reputation.
An agent in my office has two overpriced listings. Why? And to sit there and keep talking about how overpriced they are. (a condo is overpriced by 50k and the townhouse overpriced by 40k) and on the market for months...
Neal,
Great way to handle the situation. I've heard many instances where others reacted to a slap in the face like that very badly. It takes real character to respond in a collected manner in situations like that. Sellers really need to know that overpriced homes that sit on the market wind up hurting the overall market. With a surplus of houses on the market, the last thing we need to do as Realtors is take overpriced, unmotivated sellers. It's just one of those common sense pieces of knowledge that really aren't so common.
ahhh the life of a REALTOR® - unmotivated or unrealistic seller - life is full of great challenages... you are a great REALTOR® and will do the right thing
There is no point in taking listings and spending money on them if they aren't going to sell ~ so compensation really doesn't matter! Your recipe for success is quite impressive and works in this market. I am trying to position my sellers who cannot go lower to provide more ways to get the best use out of their property by providing a lease or lease option until we return to normal market conditions.
Neil,
You had been more than fair with this guy, and I see it all day long with Mortgage clients, who want me to work for free, and I tell them point blank, Go somewhere else and then come back to me, they usually come back, I think that what you wrote, is important and I did rate this for you 5...
Good Luck,
Tom Weiss
Neil
I think 50% of the houses in my market are over priced to the point that they are not really even for sale. They're not in the ball game but don't know it.
seems to be the topic today..... "pricing a home right"... You guys got it right .. lets just hope the consumer is finally getting it.... Have a great day!
Way to stand firm Neal. The last thing we need are more overpriced listings on the market. My goodness don't these folks watch the news or read? The media has made my job very easy as a listing broker. You'd have to live in a cave to not know how bad things are in the market.
Hear this too often...another great post about today's market. I circled the number at the bottom of your post, but it doesn't stay in the circle when I scroll down the screen. %-P
Joe,
I need to make a little money too so if I invest time and money...and it doesn't sell...I'm the one out. Of course we all want to make the deal happen if we can...
Brenda,
You hit the nail on the head.
Sally,
You can talk as a big-shot..but let's see how much money he has in his pocket at the end of the day.
Thesa,
A great Realtor(R)? Ive been called a great human being before:)
Renee,
You got it ....no sense in wasting time.
Tom,
Like I said I didn't take it..he wasn't willing to put anything in writing for me..he just wanted it sold and worry about me at all.I figure it I have to present all offers by law and I get a 411K offer and he takes it..I only get 1000 for me efforts.
Joe,
That's a low ration for my area..I would be without checking that ours is much higher.
Desiree,
Today? how about yesterday and the day after and so fourth:)
BB,
One of your favorite subjects I'm sure:)
Bob,
I am sure this subject is all over the place:)
Nada...."she" has nothing. i keep telling her that it's useless and don't waste any more time on them!
Neal - Gave it a five - This is exactly the type of client we do not want. they will demand more advertising, call you more, want to know what you are doing to get their home sold and downright drain you. We should only work with motivated buyers!
Paula,
I won't even write the contract for free...he forgets if I write a contract I just increased my liability for nothing.
Sally,
Grasping at straws.
I am being told by more and more FSBO's almost the same. I WANT AN OVERPRICED AMOUNT, and you get the rest...
WOW - Neal - I don't think I've ever heard it written so poignantly. As a stager, I get so tried of hearing home sellers complain about their over-paid, under-working agents. For crying out loud, do they just not grasp the intensity of how much a REALTOR does? How many other professionals "volunteer" to work for 6-12 months basically for free? It just irks me beyond belief that people think everything is negotiable. Where do they get this stuff?
OK - I'll step down off my soapbox. Thanks for the well written blog. I appreciate the insight.
Neal,
I got a call from a prospect that wants to sell her house, she wants to receive certain amount of money, when I know for sure that she can not get that amount, because her home it will be overpriced for what she wants, so will I waste my time with her? no ! I explained her what is the price with market analysis and she will not receive what she is expecting, so it is better or wait or I say to her "good luck" but I am not listing that property.
Diane,
FSBO's that really do not need to sell are just trying not to accept that all the entities that caused the boom also killed our current market...now we all will pay for a while.
Ray,
They will just suck your resources away and then hire the next one to waste more time..I think they are just looking for a break in the market but I have news...when the next neighbor sells low...it will only bury the overpriced homes even more.
You did good, handled professionally, no motivation from the seller and must think much of our profession.
Missy,
I'm just tired of sellers that are not willing to accept the fact the market has changed and if they want to sell they have to decide ...do they want to own it or they want to sell it?
Actually that is not even the issue...the issue is he wants to hire me but not pay me anything ..although I have to present all offers to him and if it is without any compensation included how in the world do I make anything from it.
Hi Neal. A very clear and concise conversation that goes to the heart of how many people think, at least in regards to our service. I have wondered for a very long time if it is REALTORS who inspire this thinking or if people generally can be this stupid.
The legal profession seem to do a more handy job of convincing consumers of their value. People are aghast at their costs but when you need one, you bit the bullet and get one.
Not so with real estate. It is seems to be equated as only a selling profession and not one based on the transfer process and being a trustee of the land, protecting , conveying it and insuring it is not unnecessarily encumbered. Consumers for the most part like us but resent us often for the what they pay for the services rendered.
I also wonder how it was that this became a contingent business, contingent on selling that is. There is tons of legal work that has no such contingency but the legal profession also provided for the winner take all scenario.
As our industry rebirths itself, with the liabilities ever more apparent, it will be interesting to watch our new industry unfold and see what it looks like for entrepreneurs that accept the new risks for the new rewards. I have an idea it is going to look like a pay cut, don't you? No more or less consumer respect, you just earn less and have more hassles.
A very smart post and one that warrants being featured because although this scenario is well known many will have valuable insight in how better to deal with and educate the consumer about what we really do when we agree to work on contingency fees.
A good post and topici, some sellers are unrealistic, some don't need to sell. Wouldn't it be great to just work with those who need to sell and have reasonable expectations and willing to pay their realtors a fair commision............... Ah but we don't all live in a perfect world. Some of us are luckier than others though at getting more realistic clients
Neal - "Been there done that". I have always felt that one of the most important lessons Realtors will learn is "Knowing when to walk away". There are a lot of motivated and reasonable sellers out there. Why spin our wheels with ones that not only want to price their home above market value but don't think our time and money invested are worth anything to them. When I learned to walk away and leave on good terms my business started to flourish. The reason it did is because I was able to focus 100% of my time working with buyers and sellers that respected me and felt I brought value to the table. Great post my friend and have a wondeful evening.
Neal, in todays market, if the sellers are not willing to pay, it's only hurting them not us. We can't afford to take an overpriced listing, with the seller determined to make as much as then could in a good market. I'm turning them down if they want to discount the realtor. Good for you!
William,
You are so right..this business is contingent on everything. If a deal went south it could be because it was contingent on my next meal at MC Donald's.:) or how many times I drove to the supermarket:)
Micheal,
I think they might just be bored and are looking to see if they can find a fish willing to pay them what they want. Again ...if it does not appraise then unless it is an all cash deal then they are just waiting for the market to change and are wasting time.
George,
I hated walking away but the more I think about it....I think that all I am doing is supporting their habit. We know it is virtually impossible to sell at that price and do they think we are that desperate to work for free? I wish they would put themselves in the other position and see how the other side lives.
Kay,
I can't wait for the market to change again...you'll see so many sellers scrambling to get their price before the next bubble.
Neal,
Way to go!! You do our profession proud by being so honest and professional. Kudo's to you. These type of sellers drive me nuts! It seems to me that they still don't get that this is our livelihood and our business! We are putting food on our table for our family's. Why should we do this for free? What would they pay per hour for us to do what is required to sell their home!
Good for you!!
Jeannette,
There is no sense wasting time with a seller who does not care to employ a professional that knows what they are doing unless they are willing to pay us for our services. My question is..do we negotiate our meals in a restaurant? no....
Neal,
I could not agree more with you, you are absotely 100% right ;) it is very difficult to undestand some sellers, they do not want to learn from our professional experiences / advises.
Ray Saenz
Ray,
Well thank you...but it doesn't take a rocket scientist to figure out there is nothing for us.:)
Neal,
It certainly seems the seller is not a ready, willing, and able seller. He's not really a seller at all! I wouldn't touch that listing with a ten foot pole.
I don't succumb to some clients' views on realtors as overpaid, underworked, etc. They're entitled to their view, I don't agree with it, it certainly isn't true for me. I keep holding myself as someone worth my pay. I'll tell them what I do, how I sell their home, we talk about the services I provide in my fee, but if they can't afford me because of the price they need or are hoping to get, then they can't afford me.
I am thinking about offering the option for sellers to pay a lump sum upfront, something smaller than the full commission to make it appetizing. It won't be heavliy discounted, but it would be an option for my sellers who desire a "smarter" commission structure. This also helps the seller to percieve that they are getting a bargain... The larger amount I'll charge at closing is something they agree to if they are uncomfortalbe footing the funds. If they foot the funds, then they are eager and willing to sell. And if they do not, I won't take the listing unless it's priced according to market (as opposed to above).
Sara,
The bottom line is these type of sellers are just looking for a free ride..they do not care that we also work for a living..We try to help our clients to the best of our ability. They think we should work for free and of course when things go wrong..they love to always blame us for something which is out of our control. they also do not let us do what we need to do.
Kathleen,
If I have to bring him an offer and he accepts it..then do I only get paid the difference and do I use an open listing agreement? No way Jose. put something on paper to show some incentive.
When people act like that. I am learning to smile and very politely say that I would very much appreciate it if they would try for the next 3 months to sell their home on their own. I tell them if they sell it then great, they have just saved themselves 6% and if not, I will gladly take their listing for one year at 6% in 3 months time or whenever they are ready. That's making a long story short but you get the idea. 6% is less than the average 15-20% waiters get! I bet if they added up all of the tips they paid in a year they'd see our 6% differently!
Neal,
Thanks for the post. I'm glad you stood your ground. I have to admit I've found out the hard way that overpriced listings are just waste of time and resources. When I first started real estate I would take listings even though I knew the price the seller wanted/demaned was overpriced. I was just happy to get the listing but I've since realized that it's better to pass on those kinds of listings and concentrate on homes that actually have a chance to sell. It's especially true in this declining market.
GOOD FOR YOU! MAYBE THESE SELLERS WILL WAKE UP. THEY ONLY WILL IF THE REALTORS LIKE
YOU STICK TO THEIR GUNS AND NOT GIVE AWAY THE STORE!! Mike