Why Do Some Agents Do This?

By
Real Estate Agent with Lanier Partners

I have been working with some buyers who wanted to get a great home from a builder. The builder will accept trades for some of his homes. These buyers wanted to use their home as a trade.

These buyers are an older couple. They were under the impression that their home had appraised for $275,000. They had the appraisal to prove it. However, the appraisal, when you finally got to the end indicated a maximum of $200,000. Based upon this appraisal, the previous listing agent listed at $300,000. Needless to say, it didn't sell.

When I presented the builders offer,  a very fair offer in my opinion, based upon current market conditions and the property itself, but considerably less than the $275,000 they expected, well, the buyers, to understate it, were disappointed.

I offered several options of where we could go from there but they informed me they had an offer close to the $275,000. Come to find out, what it really appears to be is an offer, by the original listing agent, to relist asking a price closer to $275,000.00. They are pretty sure they will do that.

I wished them well and gave them some suggestions on questions to ask and strategies to use to make sure that the listing agent was being forthright with the suggested listing price. I hope they use them.

I sincerely hope that they can get their home sold for something close to what they are being told to ask. I am completely certain that it won't happen and that they will be disappointed again. Of course, if it does sell, I will be one of the first to offer them congratulations.

But why do some agents do this? The original listing agent read the same appraisal that I did, that the builder did. Why would she ask 50% more than the maximum appraised value? I mean, this is more than buying a listing. And why would she come back and still be significantly higher with a re-list asking price? Does she really fell she is doing the right thing by this couple?

I have lost clients because I won't buy a listing or take one that I feel they want too much for and will not agree to a price reduction schedule up front. I don't want to spend my time & money on something that I don't believe in. I also have enough things that keep me awake at night, I don't need to have the knowledge that I am doing a disservice to my client as one of them. So far, especially lately, I have been proven correct. None of those overpriced listings that I didn't take have sold this year.

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Rainer
116,572
Bo Hussung
Bell Title /Triserv LLC - Nashvle, TN

Mike, people are motivated ini alll kinds of ways and alot of the times the on't tell you no matter much you rpobe and dig. You are a professional and as I like to say, you can only worry about what you can control. You did a great job. Just keep doing a great job and the rest will take care of itself. But you knew that already

Bo

Aug 16, 2008 10:20 AM #2
Rainer
22,845
Bill Dunn
Elite Realty Group - Paducah, KY

I had another agent a few months ago tell me he felt it was important to get the listing and fix the price later. That was his opinion. I suspect many other agents believe that as well.

Aug 16, 2008 10:21 AM #3
Rainer
125,240
Hope Goss
Ventura Property Shoppe - Ventura, CA
Ventura Real Estate

It's enough to make you crazy.  Getting the listing doesn't get this mis-informed agent a paycheck.  she's wasting her time and causing this poor seller alot of sleepless nights.

Aug 16, 2008 10:21 AM #4
Rainmaker
739,871
Sharon Parisi
Keller Williams Dallas Premier Realty - Dallas, TX
Dallas Homes

You did the right thing.  In the end, the sellers may come back to you because you told them the truth about market conditions.   Although having a sign in a yard is great advertising; it is not good for our referral business when the seller becomes unhappy with the Realtor because the property did not sell.

Aug 16, 2008 10:26 AM #5
Rainmaker
209,853
Janice MacMillan
ERA Joyner Realty - Valdosta, GA
Associate Broker

Mike - You did the right thing. I feel sorry for that agent and moreso for the seller. 

Bill - there are a couple of agents in our office that think the same way. Listing first then adjust price later. Even though I am new I never seen the reasoning behind this, as by the time you get around to adjusting the price you have probably lost those buyers who might of been interested in it. As much as I would like to have boo coo inventory, dead inventory is no good to me.

I just took an expired listing day before yesterday, we reduced the price by 30,000, and the sellers appreciated me being frank and up front with them.

 

 

 

 

Aug 16, 2008 10:46 AM #6
Rainmaker
414,476
Betina Foreman
512-771-6318 Austin Home Girls Realty - Austin, TX
Realtor, C.N.E. Selling Homes in Lake Travis & Central Austin!

Some people think their house is worth far more than market value. These people were obviously one of them. Good luck selling the house!

B

Aug 16, 2008 10:52 AM #7
Rainmaker
414,476
Betina Foreman
512-771-6318 Austin Home Girls Realty - Austin, TX
Realtor, C.N.E. Selling Homes in Lake Travis & Central Austin!

By the way that is a Beautiful Keeshounden on your background. I used to have one and she was a total doll! I got her from a rescue in Houston, so the climate was not ideal for her but she adapted. I constantly brushed her and took her to the groomers to get thinned out all the time. These are fantastic dogs!

B

Aug 16, 2008 10:54 AM #8
Rainer
7,746
Colleen August
Real Estate Investments - Williamsville, NY

Are you really asking for an answer? Or making a point? I totally understand, and they take the listing and then try to get it lowered, is the correct answer........and its wrong!!!!!

I give up listings as well, and I take the time to follow them on the web and then I see the price was lowered....hmmm no kidding

Sad but true, agents feel the need to just take the listing to get it, what service is that anyway??/

Aug 16, 2008 11:00 AM #9
Ambassador
327,359
Paddy (Patricia) Pizappi
RJ Smith Realty Real Estate Solutions - Pine Bush, NY
Real Estate Associate Broker Hudson Valley NY

I can't stand when agents do this.  The couple was loder and confussed enough about the market.  I am with you on pricing it right or walking away Mike

Aug 16, 2008 11:02 AM #10
Ambassador
568,054
C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Mike I agree with you and Paddy. If it isn't priced right, it will not sell.

Aug 16, 2008 11:26 AM #11
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Lorraine & Loretta - I agree, a sign is great, if you can add sold to it, but if they don't sell, people notice that too.

Bo - thanks for the supportive comments, you are right, I can only guarentee my own performance

Bill - sometimes once it's broken you can't fix it

Hope - yes to all 4 of your points, not too mention wasting marketing money that could be better spent

Sharon - they are really nice people, I hope things work out for them soon. I would love to be the one to get them into their dream (they really love the home they wanted to trade for). Regardless of who gets the deal, I hope the get there.

Jan - thanks, and good for you on getting that listing through frank discussion

Betina - I think they are being led astray with hope generated by pie in the sky. Thanks for the comment on Kismet. I have had many animals in my  life but she was absolutely special. I really miss her. They are wonderful dogs and terrific friends.

Colleen - I guess a little bit of both, I see we both have the same practice of following listings

Paddy - they certainly aren't market savvy in today's market

C - I thought you weren't going to talk real estate on vacation, but I won't tell Gail.

 

 

Aug 16, 2008 11:38 AM #12
Rainmaker
209,853
Janice MacMillan
ERA Joyner Realty - Valdosta, GA
Associate Broker

What happens too, when you were lucky enough to receive an offer for an overpriced house, and when the appraisal is done for the bank, it does not appraise for the amount stated? The sellers then have a decision to make, sell it for what it appraises for, convince the buyers that it is worth what they were asking for it and have them come up with the extra funds, or lose a sale.

I personally would not like to be in that situation.

Aug 16, 2008 12:13 PM #13
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Jan Marie - great point. Thanks

Aug 16, 2008 12:17 PM #14
Rainer
77,643
Latonia Parks
Top Bragg Realty, Fayetteville NC, Home of the 82d ABN DIV - Fayetteville, NC
Military Relocation Expert

I don't want to take the listing and deal with the price reduction later.  You are losing valuable time during those crucial weeks on the market with it being overpriced.

Aug 16, 2008 05:37 PM #15
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Latonia - if only it were that easy

Aug 16, 2008 05:43 PM #16
Ambassador
1,290,674
Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

It's amazing the other agent even KEPT the listing.

Sellers need to understand the appraisal! If it's $200k then listing for $275 is ludicrous in this market. Why do you say it's $275 but closer to $200?

 

Aug 16, 2008 05:56 PM #17
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Erica - yes it is, but look at how many clients re-list their expired with the original agent. The market value of the property is probably less than $200k. The agent they will more likely go with is telling them to list at close much closer to  $275k than to $200k.

 

Aug 16, 2008 07:24 PM #18
Rainer
91,329
Laura Watts
Positive Properties, LLC - Laurinburg, NC

Mike-Good post. I have found that Agents will promise the moon and stars to get a listing. I personally do not want to overprice a home, because of the price for advertising you have to pay. If the home does not sale or they take it from you and list with someone else, you have lost money on advertising.

 

Aug 16, 2008 10:57 PM #19
Rainer
10,705
Artisan Custom Estates
Artisan Custom Estates - Alpharetta, GA

Good post Mike - I always say one of the most important services an agent can provide is giving a reality based assessment of what it takes to sell a property - not just providing a number that the seller wants to hear. 

Aug 17, 2008 10:47 AM #20
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Cutler- agreed, but, there are some who will say anything to get the listing.

 

Aug 17, 2008 01:05 PM #21
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