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There's an example for overprice the house, even with make an offer 25% less, you still be ripped off
The seller will never get an offer with that list price. They will be lucky to get any showings.
The agent said today she has a long history with the seller and their MO is lto overprice and do multiple price reductions (resulting in a sales price LOWER than what they could have gotten if priced properly to begin with).
The agents DO give comps and let the seller know their price is too high. But agents have to set the price at what the seller says, all we can do is advise. Really, the sale will be faster and easier if it's listed at market price, why would we NOT do that? I see houses priced right that sell quickly for above asking price because there are multiple offers the first week. That should be the goal, not having it linger on the market and when it's finally priced right it's old news and nobody is looking at it anymore.
The seller will never get an offer with that list price. They will be lucky to get any showings.
The agent said today she has a long history with the seller and their MO is lto overprice and do multiple price reductions (resulting in a sales price LOWER than what they could have gotten if priced properly to begin with).
The agents DO give comps and let the seller know their price is too high. But agents have to set the price at what the seller says, all we can do is advise. Really, the sale will be faster and easier if it's listed at market price, why would we NOT do that? I see houses priced right that sell quickly for above asking price because there are multiple offers the first week. That should be the goal, not having it linger on the market and when it's finally priced right it's old news and nobody is looking at it anymore.
Maybe if one does it properly/professionally, in some cases they should tell the potential customer (seller): Thank you for considering me and I wish you a quick sale but I am not interesting in listing your home.
When asked why, answer the question which might typically be your are asking to much (money, time frame, etc.) to make it happen so it is not a win/win for the both of us.
Again, thank you for you time. Bye.
Some people never learn to fire a customer......LOL
Why you ask do if few (any) do this in the real estate business? Well it is based on two principles in the real estate market:
1. The more crap (listings) your throw against the wall, the more crap that will stick. Salesmanship 101. Not 102, but 101 and any twit can understand/believe this.
2. Over 90% of all listing, thus commissions, will be split so maybe out there somewhere there is a stupid buyer/real estate agent and if someone else brings the buyer to the table I do mind splitting the commission.
Because value is determined at a particular moment in time, the moment the property transacts in the case of real estate.
A buyer saying I think values will decline by 20% in the next year, so that's the price I want to pay today is no more fair than a seller saying I think prices will increase by 50% in the next year, so that's the price I want to get today. IMO if you want next years' price, buy next year.
Granted speculation about what may or may not happen in the future can have an effect on current market price, as long as both parties agree, but expecting it to play into the equation is flawed.
This strategy, discounting the price today because you expect the value to fall, may not be "fair" to the seller but its smart in today's market.
I always like to keep an eye on the housing market in my area. Overall houses are selling but only after one or more price cuts. You hear all of these stories about people being underwater. No one wants to overpay and be in that situation. People buy houses with the expectation of staying in them for years, but with the downsizing and layoffs you have to be prepare for the unexpected. Not a great time to be a seller.
Big disconnect between Sellers and Buyers in value
This is nothing new...this happened in the real estate crash in the 1980's. Real estate value was super high, then it crashed. Sellers kept their prices high, refusing to come down. Some couldn't sell for less because they owed too much, some wouldn't sell for less because they were stubborn. Eventually, those people got foreclosed on too or faced reality and lowered their price. This game is nothing new.
The bottom line is, a property is only worth what someone will pay for it.
The bottom line is, a property is only worth what someone will pay for it.
It's also true that a seller is free to accept an offer and sell... or not.
As has already been pointed out, complicated motivations/emotions are often involved in real estate transactions.
Quote:
Originally Posted by lemonegg
This strategy, discounting the price today because you expect the value to fall, may not be "fair" to the seller but its smart in today's market.
I always like to keep an eye on the housing market in my area. Overall houses are selling but only after one or more price cuts. You hear all of these stories about people being underwater. No one wants to overpay and be in that situation. People buy houses with the expectation of staying in them for years, but with the downsizing and layoffs you have to be prepare for the unexpected. Not a great time to be a seller.
Like I said, as long as both parties agree to consider future pricing trends when determining current value, more power to them.
Interesting that you say it's not a great time to be a seller.
In my area owning costs significantly more than renting, housing prices are still substantially above long term trends and income levels, and personally I don't see some magical economic turn around coming in the near future. I have a feeling it might turn out that now is not a great time to be a buyer.
JMHO of course.
What's wrong with that? If the value of the house is going to fall with the next year, the price should reflect that. That is what I did when I recently brought my house. I know for a fact the sellers had to bring money to the table but I had to protect myself and not over pay for a house who's value could still fall.
ITA!
That is exactly what we did.
Like the stock, buy low(er) than sell high... and never ever fall into the multi-bid game even for your dream house (then you are not thinking with your head).
I have been a seller 4 times or is it 5? Anyway, I was never surprised by what the agent suggested as a list price. I always paid attention to the market. I mean, why not? My home was an investment. I have learned though so many people are really in a bubble and I wouldn't be an real estate agent to save my life.
I have family that didn't pay attention to anything and would boost how their house will sell because its so special. :roll eyes: They would ask me, I tell them and they would get pissy. I always felt bad for their agents. My family lives in the Detroit area and the price drop of real estate is pretty astonishing. My sister paid 165k back in 1999. Her home would sell for probably 70k now if she was lucky. She put a huge down payment on the home when she bought so she is not underwater yet. Her neighbor just listed his house. He is asking 150k. He told my sister his house is worth more than the market. What a serious waste of time for those involved. Unless someone wants to pay cash for his average home no one will be buy it. A mortgage company will not approve a mortgage for 150k when comps in the area are 70k. Not sure why an agent even took his listing. All he or she is doing is wasting money on advertising.
I have been a seller 4 times or is it 5? Anyway, I was never surprised by what the agent suggested as a list price. I always paid attention to the market. I mean, why not? My home was an investment. I have learned though so many people are really in a bubble and I wouldn't be an real estate agent to save my life.
------ Unless someone wants to pay cash for his average home no one will be buy it. A mortgage company will not approve a mortgage for 150k when comps in the area are 70k. Not sure why an agent even took his listing. All he or she is doing is wasting money on advertising.
You make an excellent point that many sellers do not think about! Repeat: Even if the buyer is willing to pay MORE than the prevailing market price, the bank will NOT finance it unless the loan appraisal supports the price! --- There is always the thought that a cash-buyer will suddenly be willing to pay more, but, 'get real' --- people who are in a position to pay cash are not the ones willing to pay more.
In my opinion, realtors who take unrealistically priced listings fall into one of two categories: 1). Those who simply want to get the listing in their portfolio in hopes that someone else will sell it ... or they will be able to convince the buyer to reduce 'their listing' to a marketable level. (2) Those who inexcusably don't understand the market or the dynamics of selling real estate. (The down economy has weeded-out many of these, but, as in any profession, there are still a number of bad apples out there).
In my opinion, realtors who take unrealistically priced listings fall into one of two categories: 1). Those who simply want to get the listing in their portfolio in hopes that someone else will sell it ... or they will be able to convince the seller to reduce 'their listing' to a marketable level. (2) Those who inexcusably don't understand the market or the dynamics of selling real estate. (The down economy has weeded-out many of these, but, as in any profession, there are still a number of bad apples out there).
I think this ( red) is what you meant.
Most listings are " sold" by agents other than the listing agent regardless of the asking price. That's the purpose of the MLS.
Agents who take seriously overpriced listings do so for several reasons, including but not limited to:
-If they don't, someone else will.
- Most sellers need time and experience to comprehend that their properties are not imune to market conditions.
-A motivated seller will eventually hear the market and price right.
- A listing creates a potential opportunity to meet buyers who will eventually buy something.
- General public is often impressed by the size of an agent's portfolio which begets more overpriced listings. Some of them will eventually get sold, when they are repositioned.
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What a serious waste of time for those involved. Unless someone wants to pay cash for his average home no one will be buy it. A mortgage company will not approve a mortgage for 150k when comps in the area are 70k. Not sure why an agent even took his listing. All he or she is doing is wasting money on advertising.
Unrealistic owners ... and ??? Realtors
