IF YOU CAN'T SELL THE HOME, WHY TAKE THE LISTING?

By
Real Estate Agent with Dean's Team - Keller Williams Realty Partners Chicago IL

Saturday Morning, January 9th, 2010. 

One of the shortest meetings with a prospective Listing Client in my Real Estate Career!

The owner of a now-vacant home in the Chicago Suburb of Niles IL asked me to provide my pricing strategy and proposals last Fall.  She apparently did not like what I told her back then - and did not put the home on the market with any Real Estate Practitioner at the time.

Now, in the New Year, she surprises me with a return call.  She wants our Team to list her house now.  Under the same pricing structure as I proposed last Fall.

Problem is . . . prices in her immediate area have fallen an average of an additional 14.2% since our last meeting!

One close comparable, in the same general vicinity and Elementary School District, and in the same style and roughly the same number of square feet as her property, is still active on the market.  It is now a short sale, and has a current listing price nearly $60,000 less than it was when I met with my prospective client last November.  And it has been at this new, lower price point for over 45 days, unsold!

But she didn't want to hear about this and other realities in her own neighborhood.  She did not care about the plight of others nearby.  And she did not want to wait longer - perhaps months, even years - for the market to turn back in her favor.  She wanted her price NOW - because that's her "Break Even" number.

As a Real Estate Practitioner, I had a decision to make, right then and there.  And I made it - I would not take the listing at her too-high price.  It made no sense to do so!

Why?

It wouldn't have sold!  Further, if her listing went unsold at her demanded list price, it seemed unlikely she would later lower her asking price enough to generate a sale in today's market.  And, likely, she would have berated me every time I proposed further reduction.

So . . . faced with likely lack of respect and understanding for my future hard work on a home priced too high, coupled with about $1,000 in marketing and advertising costs, considerable time and labor to set up and manage her listing, and the slim chance of getting paid . . .

. . .  I refused to sign on!

What would have been the point?  Isn't adding an Unsalable Listing to your inventory worse than not taking the listing at all?

As good ole' Michael Corleone said in the classic Godfather movie, "Nothing personal.  Just Business!"

Would a lawyer take on a fee-contingent case without a good chance of winning? 

Would any professional take on new business if they knew the chances of getting eventually paid were negligible? 

Would a staff employee take on a new full time job if the prospective company were teetering on the brink of insolvency, and it was a crap shoot whether he would ever receive a paycheck?

No!  Didn't think so!

Yet, so often in the Real Estate Business, we find desperation agents taking on haughty clients without the likely chance of bringing home a nickel to their families.  All in the name of . . . what?  Serving the community?  Serving the client?  Getting additional listing practice?

Actually . . . Nothing!

Year's ago, back when Richard Nixon was President of the United States, I remember a cute little pop song by Bill Deal and The Rhondels, based on the long-standing saying, "Nothing Succeeds Like Success."  In the Summer of '70, I went out and plunked down $1.49 on the '45 RPM record.

Every rational Real Estate Client wants SUCCESS, and will gladly sign on with and competitively pay someone likely to get it.

The irrational ones?  Those that want their Practitioner to spend lots of money, invest lots of time, and nod their head "yes" whenever asked?  Not worth getting involved with, I would say!

You'll never get paid for the hard work you do, and neither will your clients.  So . . . what's the point?

Hey - what say you?  Please share!

DEAN & DEAN'S TEAM CHICAGO

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Wallace S. Gibson, CPM 01/11/2010 05:15 AM
  2. Barbara Martino-Sliva 01/11/2010 08:45 AM
  3. Leesa Finley 01/11/2010 05:57 PM
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Ambassador
803,543
Kathy Schowe
California Lifestyle Realty - La Quinta, CA
La Quinta, California 760-333-8886

I agree with about not taking over-priced listings.... unless you can get price reduction guarantees for down the road...  I took a listing that I knew was over-priced, but I really need the exposure in my neighborhood-- and farm area.  They agreed to reduce if we don't get any offers-- and that day is coming real soon!  Kathy

Jan 10, 2010 11:31 PM #1
Rainmaker
189,711
Darren Revell
Keller Williams Realty Temecula Valley - Temecula, CA

I agree.. it doesn't make sense to take the listing.. However, there will be someone in your area that will take the listing at their price... and sit on it for a couple months, as they probably won't take the listing for 12 months if they are going to take it in the first place at $60k over market... 

Now, time to go back out and "Find the Motivated" -  (Shift Book)

Hope to meet you at Family Reuinion....

Jan 10, 2010 11:41 PM #2
Rainmaker
291,483
Dan Tabit
Northstone Real Estate Inc. - Sammamish, WA

What, you can't sell a home for 14.2% over the current market value?  What's wrong with you? 

I wouldn't take it either, in fact you are probably lucky you didn't get it originally with that much of a decline in value so quickly.  Not your fault. 

Jan 11, 2010 02:12 AM #3
Rainer
42,564
Sally Morris
Greenwood Realty ( Greenwood SC ) - Greenwood, SC
SOLD IS NEVER HAVING TO SAY YOU'RE SORRY

I agree with you. I recently turned down a manufactured home/land listing. I had to delicately tell them that the home they purchased new and have taken really good care of will never bring what they paid for it or even what they owe on it never mind enough to cover their closing fees and a down payment on a home. It is never a good investment to buy a manufactured home with the intent of selling it later.  If you must buy one, be prepared to live in it until it is paid off, I told them. I had to tell them the value started to decrease as soon as it was pulled off the lot,just like a car. Their reason for selling was that they wanted to buy a home, in a better school district not that they were delinquent on their 30 yr mortgage! As I saw the wife's face fall into one of extreme dispair it didn't make me feel better to tell them there was nothing I could offer them except advice. Make as many extra payments as you can possibly afford and sell it at a loss and then take those proceeds and put a  nice down payment a home, but then the motivation was not there, their kids would be ready for college. My second suggestion was to save the money to move the home to another piece of land in the school district they wanted to be in and try and sell the lot it's on now. They didn't like that option either. Why can't you just put it on the market and try to sell it they asked? My broker would not be happy that I brought an unsellable listing to spend her advertsing dollars on, my advertising dollars, my time and expertise with no hope of getting paid I replied. How many businesses do you know who spend their money up front for your business with no guarantee of getting paid I asked? I didn't feel good about what I had to tell them but I wouldn't have felt any better to give them false hope. 

Jan 11, 2010 07:21 AM #4
Rainmaker
231,466
Christopher Watters
Watters International Realty, LLC. - Austin, TX
Austin Real Estate (512-298-4010)

Dean - I agree with you. We are the professionals. If they don't want to take our advice tell them to join the pool of FSBO that only sell 7% of the time for below market value. Not only are homeowners investing in us.. We are investing in them. We spend money marketing.. We spend out time, etc. Why do all of those things if your prospect is unrealistic? It just ends up costing both of you time and money!

Jan 11, 2010 09:37 AM #6
Rainmaker
633,407
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Your line close to the end says it all, Dean!  You won't get paid and neither will the client - there really is no point.  I have had sellers in the past with slack jaws when I say no - I know what I can and can't do.  I can sell a house - I can't perform miracles!  I will most definitely be reblogging this!

Jan 11, 2010 05:33 PM #7
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Rainmaker
362,833

Dean Moss

Dean's Team Chicago IL Real Estate Team
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