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Old 07-21-2009, 06:49 PM
 
Location: NJ
983 posts, read 2,628,804 times
Reputation: 1893

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I have a home for sale in NJ.

I spoke with a buyer's realtor today who had brought clients through for a second showing last week. He was calling me to tell me the clients had decided not to put an offer on the house and give me feedback about the various things that were factors in their decision. He spoke with me for quite some time.

A couple of things he told me during our conversation that I wanted to get your opinion on:

1. He said that he always tells his sellers that if they have not received an offer after 10-15 showings, it's time to lower the price. Does this sound right to you?

2. He told me there are 2 strategies for lowering price....in increments, for example $5,000 at a time, every couple weeks, or in one big chunk that would take us into the next lowest price category on the real estate search engines. With regard to this, he said the latter is often the better technique because it makes the house a great deal and encourages multiple offers which can then drive the price up.

Our house is currently listed at $324,900 so if we were to take the second option, the price would be lowered to $299,900 which definitely would make our house a very good deal. However, we are not interested in selling our house at $299,900.

3. He told me that a seller is not obligated to accept ANY offer, even if the offer is at the listing price or higher. Is this true? So we could change our listing price to $299,900 just as a strategy to bring in multiple bids with no intention of accepting any offers at that price? If we refused an offer at list price with no good reason, wouldn't that open us up to potential lawsuits by buyers who claim our refusal to accept an offer is based on discrimination?

This realtor was very helpful and spoke with me for a long time but of course, I am being cautious because I suspect he may have motives, for example wanting our business as sellers, or even trying to rope those buyers who came back for a second showing back into the game. He told me these buyers have been dragging their feet for a long time and had a contract on another house that they withdrew because they changed their mind. It was clear he wants to wrap things up with them. He even joked about how low his "hourly rate" is on these clients at this point (because of how much time he's spent working with them so far with no purchase).

Thanks in advance for any comments and input.
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Old 07-21-2009, 07:40 PM
 
3,585 posts, read 6,509,398 times
Reputation: 1452
Quote:
Originally Posted by Sassygirl18 View Post
.

Our house is currently listed at $324,900 so if we were to take the second option, the price would be lowered to $299,900 which definitely would make our house a very good deal. However, we are not interested in selling our house at $299,900.

3. He told me that a seller is not obligated to accept ANY offer, even if the offer is at the listing price or higher. Is this true? So we could change our listing price to $299,900 just as a strategy to bring in multiple bids with no intention of accepting any offers at that price? If we refused an offer at list price with no good reason, wouldn't that open us up to potential lawsuits by buyers who claim our refusal to accept an offer is based on discrimination?
My thoughts on your situation.

This is an incredibly tough real estate market for sellers (most regions). It's all about supply and demand. Look at your competition and the previous sold homes (not the ones that are for sale).

You have to ask yourself, "How badly do I want to move the home?" What you think your home is worth is not the same as what is the current market thinks your home is worth.

Whatever you do, do not let emotions dictate your financial decisions. You have to think purely in terms of numbers in this market.

In this market, if you are trying to list at 299K and hoping you are getting higher offer; that's a bad idea. 99.99% of buyers in this market will offer less than asking price (whether it's 5%-15%).

So you've drawn the line in the sand at a certain selling price point. I would not list below your selling price point because you will only get more upset at the offer you will get. Unless your 325K list price is already priced below the competition.

Have your realtor print out local comps (not from 1 year ago) but from the last 1-3 months. You need the lastest figures because the markets are changing very quickly.
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Old 07-21-2009, 07:56 PM
 
Location: Salem, OR
15,139 posts, read 37,578,662 times
Reputation: 16057
Well first I find it bizarre that he had that conversation with you since you are legally represented by another agent (MLS only real estate entries are still legal representation). We can't advise other people's clients. Yet, here I am doing the same...

If the house is unique then 10-15 showings is not abnormal without an offer. If your home is cookie cutter, then I would probably agree that it might be time to consider a price drop. Only you have knowledge of your local market and what is normal there.

If you price your home at $299,000 and get a clean offer, you could potentially owe the buyer agent their commission. The buyer agent would go after the listing agent for the monies, and the listing agent would come after you. If you aren't willing to sell at $299 don't list it there. I think that is bad advice on that agent's part.
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Old 07-21-2009, 10:16 PM
 
Location: Barrington
62,901 posts, read 42,790,809 times
Reputation: 20280
Quote:
Originally Posted by Silverfall View Post

Well first I find it bizarre that he had that conversation with you since you are legally represented by another agent (MLS only real estate entries are still legal representation). We can't advise other people's clients. Yet, here I am doing the same...
If I recall, the OP is listed with a flat fee guy. Most agents, in my area, treat such owners as if they are FSBO. The flat fee guys know this and don't care. They get paid to list, not close.
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Old 07-21-2009, 10:28 PM
 
Location: Colorado Springs, CO
1,570 posts, read 5,733,634 times
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No there would be no discrimination complaint because you won't accept an offer for the list price. I don't even think there could be a claim for a commission because a closing did not occur - and no one can force a seller to sell. Nevertheless listing your house at a price you are not willing to accept is crazy.
Also, I think lower a price in increments is not a great idea. As a buyer's agent I have tracked that and it's easy to figure out how much a price is going to drop.

In this market you need to review current comps and you must price your house for a bargain. You need to undercut other homes for sale and the home must show well, the marketing must be top notch., etc. Here in CO, the market hasn't been as bad as other areas but it's no easy sale out there!

If I may say so, this is a perfect example of how a full service listing agent would be worth the money to you. Marketing and pricing must work together.
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Old 07-21-2009, 10:34 PM
 
Location: Barrington
62,901 posts, read 42,790,809 times
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If I recall, you have been trying to sell now for about 4 months, or so. You averaged the prices three agents gave you and listed with a flat fee guy, instead. As a result, no one is interpreting your local market and its reaction to your home.

4 months and no offer says all that can be said about the market's reaction to your listing.

Who knows what this agent's motivation was. He interpreted the market for you and essentially told you that you need to reduce your price by 7-8 % to increase the chances of getting sold.

Every seller has the choice to set or chase the market. Those who choose to chase it in a depreciating market, usually end up with less net proceeds than those who set the market.

If you do not need to sell or choose not to sell for what the market will bear, why not withdraw your listing from the market?
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Old 07-21-2009, 10:35 PM
 
Location: hampton roads
68 posts, read 163,965 times
Reputation: 68
You said it all in the first sentence; "Buyer's agent" and his client. This is like talking to the attorney who represents the other party. NO NO
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Old 07-21-2009, 10:38 PM
 
Location: Salem, OR
15,139 posts, read 37,578,662 times
Reputation: 16057
Quote:
Originally Posted by MMichelle View Post
No there would be no discrimination complaint because you won't accept an offer for the list price. I don't even think there could be a claim for a commission because a closing did not occur - and no one can force a seller to sell.
I disagree with this. If an Hispanic family made a full price cash offer at the asking price and the seller refused to sell at that price, that would look pretty bad, IMO. They could file a fair housing complaint and then the seller would have lots of issues to deal with. It may not be true, but it also doesn't mean it would create undue stress for the OP.

If I brought that same cash buyer at that price and the seller refused to sell the home, then my MLS would allow me to file a complaint. The MLS is an agreement to pay a commission. So the agent on there is advertising that for the terms listed on the MLS, a buyer agent commission will be paid. The OP would need to ask her flat rate company about what the MLS rules are regarding that before heading down that path. You can't force a seller to sell, but that doesn't mean that there aren't monetary consequences for that.

OP, I still contend that if you are unwilling to sell at that price do not list at that price. Just understand that just because you want a price doesn't mean that buyers are willing to pay it.
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Old 07-21-2009, 10:53 PM
 
280 posts, read 979,992 times
Reputation: 127
I don't know, banks refuse to sell for their list price all the time (short sales/foreclosures) and to my knowledge this isn't interpreted as discriminatory.

That said, it's probably frustrating to both buyers and sellers, as buyers are going to offer below the list price while sellers are hoping for offers above it.
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Old 07-21-2009, 11:46 PM
 
11,504 posts, read 11,003,655 times
Reputation: 7686
Quote:
Originally Posted by novahousehunter View Post
I don't know, banks refuse to sell for their list price all the time (short sales/foreclosures) and to my knowledge this isn't interpreted as discriminatory.

That said, it's probably frustrating to both buyers and sellers, as buyers are going to offer below the list price while sellers are hoping for offers above it.
I have never heard of a bank refusing a full price clean offer.

That doesn't happen - the only exception would be in a multiple offer situation where an REO can typically sell for more than list.
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