Oh Leo do we know that story!  Marcia and I went on a listing appointment.  We did our homework.  Had our pretty package ready.  And when we got there found out only the wife was available.  Husband had been called into work.  This was early spring a year ago and we knew the market had started to slow.  The couple was moving out of state to CO and wanted to move by summer if possible.   After viewing their home we sat down with them.  We felt we hit if off well with the wife, she asked very good questions.  But could not pull out the listing agreement without hubby.  She said she would call us the next day after talking to her husband.  The next afternoon good to her word she called, but only to tell us that they would be going with another agent (a father and son team who farmed that neighborhood)  When the listing came on the MLS Marcia and I couldn't believe what we were seeing - this cute little 1200 sq ft home was priced the same as the 1800 - 2000 sq ft homes in that neighborhood!  And mind you these people needed to move by Aug.  Well the house did finally sell the following Nov. and for just below the price Marcia and I had given them as their low price.

Jana

I have passed on so many listings that are overpriced.  They just won't move.

I have noticed a number of agents that list significantly higher than they the CMA support and then lower the price 2-3 weeks later to where they should have initially listed.  Part of me wonders if they do this stricktly to obtain the listing.  However, part of me wonders if they are just passifying the sellers with the 2-3 weeks at "their" price and then the change is "bringing them back to reality."  If anyone has done that - it would be interesting to know.  Just last night I sat across from a very sweet couple who wants 30K more than I recommended.  I have the numbers as support.  However, it will be interesting to see how things play out...

I don't have any problem with agents who take over-priced listings but it's not a business plan that works for us.  In a buyers market, sellers need a lot more attention from us and constant CMA updates, etc.  We don't need or want the added problems associated with a lack of showings due to the property being priced too high.

At least if a property is getting a lot of hits/exposure (which we can verify with our wonderful P2 syndications, stats, etc) and it is getting a substantial amount of showings, the seller knows that we are doing all we can to get the home sold.  Overpriced listings may get a lot of hits, but they get very few showings... this is 'rightfully' alarming for the seller and it is hard to convince them that the price is too high if we take the listing too high to begin with (unless we spell it out in the beginning with agreement to lower the price within a reasonable time-frame if there are no showings).  Still, we prefer to just pass on the overpriced listings and let someone else deal with the disgruntled seller.

Just thrilled to see that (so far) no one has taken an overpriced listing and no one has a problem with an agent that did. Blah-Blah-Blah.... Blah-Blah-Blah. I've taken a few overpriced listings; either because the owner wanted to try it or because I wanted the listing. You can cry all you want that "you don't have a problem with it and "you would not do it"; but I got the listing.  I can market it, I can get residual business from it; I can keep my client informed to changing market conditions and ask for a reduction, and, yes, I can close the puppy with me and my client being very happy.  Have a couple expired on me? Sure....sometimes you eat the bear; sometimes the bear eats you.  But it sure beats having your hands in your pockets watching the other guy who got the listing.

That is wonderful that it works out so well for you Phil.

Perhaps I missed something, but I didn't get the impression that anyone was/is 'crying' about agents taking overpriced listings.  I thought that Leo was asking others if they find it profitable or prudent to do so.  We have taken some that we felt were overpriced (in fact we have one right now) and then there are some that are priced about right (maybe a little high) in the beginning but due to market shifts become overpriced within 30-45 days and need adjustments.

If taking the overpriced listing works well for you, that is truly wonderful.  For some of us, who have quite a few listings anyway, the overpriced listing just becomes more of a burden than an asset.  Different business plans work for different people... that isn't to say one is bad and the other good - just different.  And we can learn from each other.

Perhaps you would be willing to share how you are able to get an overpriced listing sold... I, for one, would love to learn new techniques that could convince a buyer to pay $30,000 more for one townhouse that is identical to the one right next door to it.  Please enlighten us!  We are here to learn and share.

Love those overpriced listings they last so long you don't have to get new ones :)

I've taken overpriced listings because I was afraid to turn them down. (New agent, afraid this would be the last I'd ever get... you know how it is.) I've also had those same listings expire after three months and three showings. Then there are the overpriced listings I've turned down, because I didn't think they'd sell and dealing with the owner wasn't worth the hassle. (And lo and behold, sometimes someone else was able to sell them, for a price the market sure didn't support. Somehow, they managed anyway.) These days, I'll take anything anyone will give me, try it for a while, and with proof in hand, convince the seller to lower the price if necessary. I won't recommend listing it higher than what the market dictates in order to get the listing, though; I'll overprice it if the seller insists, but not otherwise.  

Tim and Susan; Thank you for your reply. Another exceptional reply. You're might put me out of business sooner than I thought. First, I'm happy to see that you took an overpriced listing,stood up, and admitted it. Second, you'll get use to it....either they are crying because another Realtor "done them wrong" or there's too many homes on the market, whatever. Most like to cry here.

Anyway, I never convinced anybody to overpay for anything. But I'm going to list my townhouse that's next door to your listed townhouse; and I'm going to list it for $30,000.00 more than yours. And (from past experience), I'm going to get the calls asking me "wazupwidat"!! And I'm the one (from past experience) who gets to say "ok, fine, you're right...then make me an offer". I'll probably close it at your list price; but it's because I got the calls.  Will this work in every scenario....hell no.  My whole point is that it just might work.  And a "might work" is a whole lot better than "no work".

LOL - Well, our overpriced listing is getting only a few calls and zero showings.  The sellers have decided to reduce it to be in line with those that are actually selling... what a novel idea! LOL

I put our CMAs on a spreadsheet and the two most 'convincing' figures for most sellers are the price comps sold at and THE LIST PRICE of those now in PENDING status.... amazingly, those in pending are always just a little bit higher than those that 'sold' and are on the market for far less time than those that are still active.

I use EVERY comp (never just pick out 3 or 4 to 'make my case') and separate them on the spreadsheet between the 'active', 'pending' and 'sold'... then ask the question: "Which group do you want to see your home in 3 months from now?"  The obvious answer is "the sold" group.  The next step is: "So, to get into the 'sold' group within 3 months, we need to get it into the 'pending' group first.  Do you see any commonalities between the 'pending' and the 'sold' groups?  And, how do they differ from the 'active' group?"

In a buyers market, the answer is almost always the same - all things being pretty much equal, PRICE SELLS.  

Leo,

I'm not so sure that there are very many agents who deliberately mislead sellers into pricing too high.  From talking with agents in our office (who do take overpriced listings) I get the feeling that they just don't have a solid CMA presentation and are 'afraid' to turn down any listings because they just don't have many.  As the leading listing agents in our office (not boasting, just stating a fact) we don't feel that 'pressure'... in fact, if I get a strong feeling over the phone that the seller (potential client) is just head-strong determined to list at a too high price and/or is looking for a discount commission I just politely tell them that we may not be the right agents for them.  Sometimes they soften up and ask us to help them and sometimes they say "fine" and hang up.  

I'd rather not waste time trying to convince someone against their will.  If they are open to listening to what we have to say/offer, I am more than willing to talk to them and then, if they still think they can get a higher price or that they'd prefer a discounted commission, we part ways and move on....  that's just life and business.  But, my time and marketing dollars are valuable to me and I'm not a fan of wasting either.

Again, that is NOT a slam or criticism of agents who operate their business differently.  To each his own... what works for one may or may not work for another.

Leo, I didn't get a listing recently because the seller wanted to list way past my comps showed. They had made alot of improvements to the house they just bought 2 years ago but the market was not favorable for them with the price they had in mind.

I finally told them if they would not trust my comps then get it appraised by an appraiser in our area, if he was ok with their price then I would be too. I even offered to pay half the appraisal up front. They said they would call me back. One month later it is listed with an agent out of our area at their price. Yes, I was frustrated but I really hope they can get it down to where it will sell.

I have taken overpriced listings but upfront I let them know it will not sell at this price and we will be fortunate to even get calls on it. We really can't help what other agents do, they will look bad if they can't sell it if they told the seller that was a great price. All we can do is do our job well, give them the facts and be honest with them. We give them the information to make a sound decision and if they don't trust our judgement based on facts that was their choice. Frustrating, yes, get more listings being dishonest with people, sure. Our choice.

Phil has no problems with this because of his over abundant charm. :)

I don't like to take overpriced listings but I do take them but only if the seller agrees to lower the price to where I believe it should be based on the comps within the first two weeks or so. A lot of the sellers really need the proof that their dream price is not going to work and if the first few overpriced weeks will do the trick, then I do it. But If I get the feeling that they will want to stick to their high price, I don't take the listing. The marketing doesn't come free and in most cases just the fact that I can market the listing does not outweigh the negatives.

I am heading out to a listing presentation on my own expired listing. Expired last week and the truth is that unless the seller really wants to get serious, I might not want to relist. We will see.

I've got one right now that I'm ready to hand back!! it happens.  

And I love when Phil lists in a neighborhood or townhouse next to me, so Phils listing can help sell my listing!!  When I am talking to an owner that wants to overprice, we will show them how their neighbors should thank them for helping to sell their houses.   Your overpriced listing makes their homes look good in the area.  Keep it up Phil!!

We have some in our area that do that as well, but usually it is the seller that sets the "too high" price. i have been know to go along with their price, but I have it written in to the listing agreement that we will reduce the price within 2 weeks. I usually have an amount written in there. Keeping in min that as the agent I can tweak that clause a bit, but only if i see fit. If by chance we are all of a sudden getting good activity maybe we will extend that that time or change the amount, but there is always something written in to the contract. and if you think about it, why not take the listing. Someone is going to sell it, why not you. Just be sure they know right up from that you made it clear of what pricing you recommend to bring it on the market.

LOLOLOLOL Dan! Thank you for that giggle this morning!

Update from this morning ... looks like my seller got the point and is more reasonable this time around. We might actually have a shot at selling this place in a decent time! let's put the listing back on the market!

Good job, Michaela!  

Oh boy... I KNEW this was going to be a good thread <grin>.

Me? Unless the asking price is ridiculous, I'll take the listing too.  Why not?  I make a BIG deal of having the seller initial right next to the list price to make then understand that it's their price, not mine.  LOT's of initials!  Initial my CMA here, here, here and here please.  

Heck, I too lost a listing to a neighbor because I wanted to  "..give  his house away."  It's been for SALE over a year now. HAHAHAHAHAHA

Now days I don't even pursue listings.  If I get one, that's good.  If not, that's OK too.  Whatever.  

I go after buyers.

Sticky question Huh ? Not really,

I will take any listings and will leave it up to the Buyers and Sellers along with the Appraisers to determine what the price should be, if in fact the home is over price then the buyer and sellers can negotiate some more if they want, or just part ways..

It's between the buyers and sellers who ultimately decide:)

Now go easy on me ok...but think about, Hummm

Vance

it is between buyer, seller, and appraiser/mortgage company.  However, a buyer has to find it and want it.  If I represent seller, i am not giving my best advice if I go in and represent that the house will sell for more.  My job is to give best advice of my ability.  Now, if the seller still insists, then I have to decide.  Do I want to spend my money trying to find a non-existant buyer?  Or do I take the listing knowing I won't spend as much on it?  Lots to think about.

It seems that you view this kind of like us, Shelly.  While there is no argument regarding the fact that price is determined by what the seller and buyer agree upon, the question for us is "do we spend our time and money marketing something we believe has a snowball's chance in Miami of selling?" LOL

For instance, if I have a 1992 rusted out Kia with 200,000 miles on it, AC doesn't work and it won't start, I have every right to ask whatever I want to for it and hope that someone comes along and offers me a price we can both live with.  So, if I want to ask $40,000 for it that's all well and good.  

Now, who is willing to spend THEIR MONEY to advertise it for me?  Any takers? (hey, I'll even pay you 4% of the sales price if you can find me a buyer and we agree on a price).

On the other hand, if my business plan involved simply placing the listing in MLS and doing nothing else I might consider it.  But that isn't the way we do business... when we contract to list a property, we spend a lot of time and money giving it the most exposure we possibly can.  To each his own... there's plenty of room for all different types of business plans in a free economy. :-)

I have a 1992 rusted out Kia with 200,000 miles on it, AC doesn't work and it won't start,

"You mean to tell me you still have that Kia I sold you?? "

ROFL... sweet ride! (Purely hypothetical situation for anyone who doesn't know we are kidding... not that there is anything wrong with owning a Kia. LOL)

Kind of agree with Vance on this one.... Negotiations are between Buyer & Seller.  Seems like a lot of agents out there want to be overbearing with their pricing "opinions" when in fact they have no dog in fight.

In terms of taking a listing, if 15% more than "fair" value, will hold "adult" conversation with Seller and/or move on.  But in reality, choosing an Agent should be based on Agent Skillz not price opinions.

Spoken like a 'politician', Radley. LOL

"No dog in the fight?"  I beg to differ - As soon as the agent spends a few hundred bucks on marketing (or $1 for that matter) he has a 'dog in the fight'.

"Overbearing?"  Who, when and in what way?  Why offer an opinion at all if you can't or won't defend it with facts?

So your limit is 15% above 'fair' value?  Don't you have to have an 'opinion' and a 'dog in the fight' to even make that statement and/or evaluation?

Every price opinion model we offer is in a 'range' - never a specific number/price.  We show ALL comps and then focus in on the lowest, highest and average and demonstrate the probability of a sale in a given time period based on the data available.  If the highest sold is X and the highest comp is X plus Y but the seller wants to add another 15% to the X plus Y figure, it doesn't make a lot of sense for me to spend my money marketing it... I base that decision on economics - not on an over-bearing opinion.  I'm just not wealthy enough (yet) to throw away money.

And I've yet to meet the agent "skilled" enough to sell that hypothetical beat up old Kia for $40,000.  Perhaps I've just never met the amazing Radley yet. LOL  (By the way, with your amazing skills I'm shocked that you aren't buying up every piece of property in Atlanta and selling them all at 15% above market value - you could be a very rich man by now.)

I just read what I wrote and think it could be mis-construed as being contentious...  that's not my intent.  It's just impossible to convey 'tone' when typing and I meant it in a light-hearted tone. Just wanted to clarify so there's no misunderstanding. ;-)

Realistically,

It is Buyers and Sellers who determined price, us agents or brokers. we do render a opinion on what the home may bring with a market analyst, but that is far as we really can go..

We do not have a clue lets say a buyer just may make up the difference in price of a home that may not appraise out, or if a seller that may have a home that is in the high  price range will settle for less then market value.. or somewhere in between we just don't know.

My crystal ball is out for repair now, so I can not help either buyer or seller.

The only person who decides a home is over priced is a license appraiser, there are some agents that are both and can tell the seller that their home will not appraise out, then that seller needs to make a decision based on the agent/appraiser statement.

Either way it still all comes down to the Buyers and Sellers negotiations for the final outcome..

Advertising is part of doing business, win some loose some,

I have a listing now that is 200k under  appraise price and it still sits there..it was lowered from 800K to 599k you just never know was the 800k over price? --it was for personal problems it was lowered..

Look at the log retreat on 20 acres its my front page

http://www.GeorgiaPeachRealEstate.com

Vance, KIA Jacksonville FL.

I LOVE that property!

It's the unique ones like that you never know what they will fetch.

I had an authentic adobe estate that had no comps whatsoever. Owners had it FSBO for 2 years at 450k. We listed it at 525k, got 510. The appraiser had a nervous breakdown over it . . . but it did close. He had to go way outside of the area to get the comps given the construction method (adobe block main house, straw bale artist's studio)

This is on all my sellers' pages. It's a Joe Klock article and pretty much nails it for me:

http://realestatebhc.com/libraryimages/HomeSellers.PDF

Now that is to funny. Candice

One of my sayings almost everyday is exactly that Price, Price and Price

it overcomes everything sooner or later.

Yea I will tell ya this of all the homes etc I have seen over the yeasr that property is all ME , you have to see it in person Wow..

I gave it its own domain name.

http://www.GeorgiaLogHomesOnline.com

But I like action so Atlanta rocks and the market is not all that bad!

Absolutely . . . there is no defect that price cannot cure.

I just had breakfast with my seller, we just recieved a full price offer on her house with some CCA.  Quick close of Aug. 15.  This house has been on the market for about a month, and got great action.  It was always the bridesmaid though, not the bride.  Until Friday the 13th.  Received the offer yesterday, and finalized today.  Being the bridesmaid meant that although it was highly considered, something else beat it out at final asking time.

Anyway, at breakfast, the seller tells me that she interviewed another agent (we knew that).  She goes on to tell me that the other agent suggested a selling price 20k to 30k higher than ours.  When she looked at the comps, they were for a new subdivision several miles from her house.  Our comps were much closer, in distance, size, age, etc.  We said as much as we would like for to get more, realistically we though this was the number and to be prepared for CCA.  She told me that she knew we were the right agents for her as she had done some homework before.  There are 3 other homes in her neighborhood that are priced higher and have been on the market for months and are still on the market.  

We marketed this home, she did her job, and it is going to close within her time frame. there is just nothing that can beat a good CMA, and an agent who is willing to defend it, and a client that uses their brain and not emotion to make decisions.  

Just my humble opinion.

Shelly, I'm not awake yet. What's CCA?

Shelly, congratulations!

just one question ... what's a "CCA"? ... I'm not really good with abbreviations :-)

Candice, thinking alike today? :-)

So sorry, CCA  closing cost assistance.  We use so much around here, i just thought it would be easier to type.  My humblest apologies, I should know better.

shelly

LOL, great minds. . . Closing Conditions Amendment? Chocolate Covered Almonds? Concert Car Aroma? LOL

Ah! Got it! We don't have that form . . . we should.

no form, but there is a place on the MLS where you can indicate if you are offering CCA or Seller Concession: price or nego.

And then it is put in agent and/or public remarks CCA 5k or something to that effect.  

See, now you can start using it!!  Do you also use FROG?  It is so common here that civilians refer to their Finished Room Over the Garage as their FROG.  My son thinks it is hilarious!!  and wants to know where our FROG is!!!

Concert Car Aroma:  the smell of incense burning in the ashtray to cover the smell of XXXX.  LOL!!!

No FROGs in my area :-).

We have a space in our contracts (has been added quite recently) where the buyer can ask for credit. Since lenders nowadays don't want to allow credit for repairs, it is usually done as credit towards closing costs. The problem then is when you're asking for more credit then what the actual closing cost will be .... but that would be a topic for a whole new thread.

Our contract has a whole section about settlement costs and what are settlement costs to purchaser and to buyer and that each are responsible for those costs except as provided below:  then space to make adjustments.  My standard is:  Seller to pay $XXXX to be used at buyers discretion.  

No mention of closing costs, or prepaids, etc. then the buyer can use those costs towards Closing costs, prepaids, buy down, title insurance, etc.

the repairs money gets tricky but is usually handled on an amendment.  Radley loves amendments!!!

LOLOLOL! Riders of the Purple Sage, man . . .

Thought you had a separate form to address seller paid closing costs. Ours is in the PC too, but we always seem to have to add 'something' to protect someone.

FROG, that is great. We don't have many of those, but we are getting more as the garages have grown to accommodate the huge boats and many toys people want to leave here at the River.

Shelly, do the lenders ever have trouble with a discretionary credit like that? They don't usually like to loan money for 'stuff' they can't define.

We also have a ROG, that is a room over garage, maybe finished, maybe not!!!  I frog is so much better than a rog!!

nope, as long as it is within the 3% (or whatever they have designated).  And of course money cannot be handed back at closing.  It is lawyer recommended language so that it reduces arguments.  For instance, if I write $5k in closing costs, that does not 'really" cover pre-paids, etc.  So when written at buyers discretion, it takes out the ambiguity.  Or say you write 10k in CCA and Prepaids, but they only take $7k, well there is still $3k left on the table, buyer can now use that money to buy down the loan, possibly.  As long as it is within the appraisal and within the stated guidelines of allowable seller concessions per the mortgage.

Shelly, but they can't earmark monies for personal property such as furniture, etc, can they?

We've had agents bring us contracts with that kind of verbiage and it never flies with the lenders . . . .

No.  It is in the settlement section of the cotract.  And it shows up on the HUD1 in the appropriate places for costs associated with closing.  It just keeps it open that the buyer can use it anyway they need at settlement.

To many sellers don't really care what we think the right list price range for their home is unless our price is higher then their price. If I will not list it for an inflated price another agent gladly will. The seller could care less what the numbers show until they can not sell their house. At that point it is always the agents fault.

And guess what?  They are not going to call the agent who gave them the correct information in the first place. When you call them they don't want to talk to you. Why? Do you think they want to admit to themselves they made a mistake by not listing with you?

So, if it does sell you miss out.  If it does not sell you miss out.

What is an agent to do? :)