Telling Sellers What They Want to Hear . . . While Trolling for Other Business
[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced.]
If you aren’t a Realtor (and don’t have a magnifying glass), the photo above is an archived MLS listing history for a certain Edina home that I interviewed to list almost exactly a year ago (where the arrow appears).
At the time, the home was under contract with another agent, and the dissatisfied owner was interviewing other Realtors to take over the listing once the soon-to-expire contract was up (note: agents can’t solicit homes currently under contract, but can respond to owners who contact them).
My take, which I shared in painstaking detail with the owner during a 2-hour meeting: while the home had been poorly marketed, it was also severely overpriced given its (dated) condition.
My recommendation (besides better marketing): strategic updates totaling less than $10k, combined with a more realistic asking price.
“Next!” (x 3)
What happened next?
The owner vehemently disagreed, and we (politely) parted ways.
What happened after that?
No less than three other agents took the listing at the last asking price, only to have the listing expire/cancel on them.
Going back to the archive history at top, each row corresponds to a change in the listing’s status — in this case, a succession of “Expired’s,” “Cancelled’s,” and — when the owner changed agents (again) — a return back to “Active” status.
Caveat Venditor (“Seller Beware”)
So, did the other agents waste their time and marketing dollars? (that is, assuming they invested much of either — see below).
Not necessarily.
While none of them earned a commission selling the (still-unsold) home, it’s certainly possible that they profited in other ways.
That’s because, especially in a Seller’s market with tight inventory (i.e., today), a “For Sale” sign in a desirable neighborhood is guaranteed to attract at least a few prospective Buyers, even if the home is overpriced.
Predictably, some of those prospects won’t have an agent yet.
Voila!
The agent listing the overpriced home ends up representing — and selling a home to — the heretofore unrepresented Buyer(s).
Differing Agendas
The takeaway for would-be Sellers?
There’s always an agent — or ten — who’ll agree to list your home, at your price, however unrealistic.
But, that’s because they have a two-part** rationale: 1) they figure they may always get lucky, and attract a Buyer who’s willing to ridiculously overpay; and 2) even if they don’t, they may pick up other business from the unsaleable listing.
Personally, I’ve always found that m.o. cynical, and more than a little demoralizing (because you know you’re wasting your marketing efforts trying to sell the overpriced home).
That is, assuming you are genuinely trying to sell the home . . .
P.S.: As I tell prospective Sellers, I guarantee there will be always be another agent who’ll take the listing at a higher price, and at a lower commission.
But, that’s not what their focus should be.
**Strategy #3: get the listing for an extended period of time, banking on the Seller eventually getting discouraged (and more realistic), and relenting to a price reduction.
See also, “The Serenity Prayer — Realtor’s Version“; “Perils of Overpricing Even (Especially) in a Rising Market”; and “Perils of Overpricing.“
