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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Ambassador
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Erica Ramus
MRE, Schuylkill County PA Real Estate
Erica Ramus - Ramus Realty Group - Pottsville, PA

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?

 

August 16, 2008 05:56 PM
Rainmaker
563,876
Mike Saunders
Lanier Partners

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.

 

August 16, 2008 07:24 PM
Rainer
91,329
Laura Watts
Positive Properties, LLC

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.

 

August 16, 2008 10:57 PM
Rainer
10,705
Artisan Custom Estates
Artisan Custom Estates

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. 

August 17, 2008 10:47 AM
Rainmaker
563,876
Mike Saunders
Lanier Partners

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

 

August 17, 2008 01:05 PM
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Mike Saunders

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