Overpriced Home as Buyer Bait? Maybe, Maybe Not
[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.]
I know many of my colleagues vigorously disagree with me — especially in a seller’s market with crazy-tight inventory like today’s — but I believe that there IS such a thing as a bad listing (still).
What makes a listing “bad?”
Ultimately, just one thing: price.
Why do some agents knowingly take overpriced listings?**
My educated guess is a combination of three reasons: 1) they think/hope the market will eventually rise to the Seller’s asking price; 2) they’re banking on the Seller eventually becoming realistic, and lowering their price; and 3) in the meantime, they figure they’ll pick up Buyers attracted, somehow, to the overpriced home (see, “crazy-tight inventory”).
Waiting Game
At least for me, reason #3 feels cynical and disingenuous (or if you prefer, “icky”).
It’s also the case that representing an obviously overpriced home is not exactly a great calling card when it comes to signing up new clients.
As for reasons #1 and #2 — time being on the Realtor’s side — I know from (too much) experience that the reality is, “maybe, maybe not.”
For every Seller who eventually sees the light and lowers their price, there’s another Seller (or three) who psychologically digs in, and blames the agent’s skills and/or effort for their home not selling.
Meanwhile, tight housing markets have a way of . . . loosening up.
New listings pop up at more attractive prices; serious Buyers (and their agents) home in on such listings and make their move; and all the while overpriced homes . . . sit.
Weighing Opportunity Cost; or, The High Price of Being Demoralized
It’s all kind of soul-killing for a good, motivated agent.
In turn, that sense of dejection and frustration has a way of spilling over to other potential clients and deals.
Which begs the $64,000 question for a Realtor contemplating dealing with an unrealistic Seller: “while I pour my time, energy, and marketing $$ into an overpriced listing, how many other, saleable listings am I losing out on?”
P.S.: There’s a cheeky Realtor line ” which I’ve certainly thought to myself, but never uttered ” that one supposedly says to a Seller with unrealistic price expectations: “If I can’t be your first Realtor . . . maybe I can be your last.”
**In such Realtors’ defense: it’s not always obvious. That’s the case with truly unusual and/or many upper bracket homes, where the Comp’s can be nonexistent.
See also, “The Serenity Prayer — “Realtor’s Version”; “Realtor Compliments”; “Taking Would-be Sellers on a Tour of Competing Homes? Bad Idea”; and “Perils of Overpricing Even (Especially) in a Rising Market,”
Plus: “Just Tell ‘Em to Make an Offer: Why Buyers Don’t Make Offers on Overpriced Homes (at least in Minnesota)“; and “Top 10 Signs a ‘For Sale’ House is Really For Sale.”
