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Jim Walker, Real Estate Pro in Carmichael, CA

Do agents consider overpriced listings considered to be advertising money pits?

Asked by Jim Walker, Carmichael, CA Sun Aug 5, 2007

Inspired by Josh Hohman comment in earlier post. - I love statistics. Read your stat that the zip with the higher priced homes came down 1% in sales price to list price versus median priced home zip came down 11.7% SP/ LP . Possible inferences 1. higher end sellers more realistic about market value than median owners? 2. Agents working the higher market refuse overpriced listings that will just be advertising money pits, while agents working the medians are betting that their ads for median houses will draw prospective buyers that they can sell other houses too, thus they are willing to accept overpriced listings for exposure sake? 3.(Josh's inference) Upper end buyers are less affected by tightening mortgage rules, as they have their own sources of funds and need to borrow less on a percentage basis?

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Durring my last recert I was in a continuing ed class and the instructor had a funny way to look at this. Basically he said when you take an over priced listing your saying, "I know the home won't sell for this price, I'll spend alot of my own money and time marketing and advertising the property, but I'd better do this because I wouldn't want one of my competitors to waste their time and money and reputation". Kinda funny when you look at it in that perspective. If you do have a seller who won't take your professional advice seriously perhaps offer to refer them to another agent who might. If you were completely wrong you might still get a referral and still have a happy seller. Just a thought.
Web Reference: http://www.medfordhouse.com
1 vote Thank Flag Link Mon Aug 6, 2007
In our current market, there is NEVER a strategic value to an overpriced listing no matter what price segment of the market it fit's into. Listings do generate Buyers, but only when they are appropriately priced. Taking an overpriced listing not only is a waste of time and resources, but it harms your credibility with prospective clients and demonstrates that you are not committed to serving the best interests of your Seller's. Putting an overpriced listing on the market also clogs the market that is already bursting with too much inventory (our area is at 20 months worth of unsold inventory...partly because many agents still don't know how to turn down an overpriced listing!). If you're an agent out there, please, oh please, refuse to take an overpriced listing! If you're a broker, please make sure your agents aren't taking overpriced listings! And if you're a Seller, please look at the market information carefully and listen to your agent (provided you've taken the time to make sure you're working with a good one) when it comes to making a decision on your listing price.
3 votes Thank Flag Link Sun Aug 5, 2007
Glad to see you taking the time to post. Your add insight, voice and compel one to think. Tx!
2 votes Thank Flag Link Mon Aug 6, 2007
Deborah Madey, Real Estate Pro in Rumson, NJ
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Jim,

We missed you....where have you been?

We have many, way too many, overpriced listings in our marketplace in higher end homes. I only wish I could say that the sellers were more realistic, or that agents said "no" to overpricing.

I could be mistaken, but i think the lending guidelines are tightening more in jumbo loans than in conforming. Would be interested in mortgage rep feedback on this one!

To borrow Barbara Corcoran's line....."You can't advertise your way out of a bad market." She is my hero!

My line....."You can't advertise an overpriced listing into a contract."
2 votes Thank Flag Link Sun Aug 5, 2007
Deborah Madey, Real Estate Pro in Rumson, NJ
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Jim - The higer priced zip is faring better in terms of median home price. I made no distinction between the 2 zips in San Ramon for the analysis of LP/SP. Sorry for the confusion - I wasn't very clear on my post...
-Josh
Web Reference: http://www.BayAreaREI.com
1 vote Thank Flag Link Mon Aug 6, 2007
Hello, I'm a mortgage banker, so I generally don't respond to questions regarding asking prices, listings, etc, but has anyone referenced the below site for real estate asking prices and inventories in a given area? I believe it may be a good source to determine trends in an area.
1 vote Thank Flag Link Mon Aug 6, 2007
Josh, your clarification actually confused me more. Was I right to infer that the higher priced lp/sp was better than the median priced lp/sp?
Deborah- Last week I just read posts but did write. It takes a lot of time for someone as verbose as me.
All- 4 of you so far say overpriced listings are money pits, and worse. I have a companion thread on the subject started too.
1 vote Thank Flag Link Mon Aug 6, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
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YES! I consider a lingering listing to be a liability on my books (and reputation!) until it sells. I agree that allowing it to continue is a disservice to my clients as well. To me, this is not especially 'good exposure'. At any price!
1 vote Thank Flag Link Sun Aug 5, 2007
Jim,
nice to have you hanging around again asking intriguing questions... I think the inferences made by Josh are good ones, to I tend to agree with him. But--big but here--I'm going to check my MLS stats here, as soon as I can (probably tomorrow), and see what they say...
1 vote Thank Flag Link Sun Aug 5, 2007
I will not take an over priced listing. I don't have the time - or the budget -to do so, plus I feel it's a dis-service to the seller, as well as our industry.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Sun Aug 5, 2007
Cindi Hagley,…, Real Estate Pro in San Ramon, CA
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Inferences 1 and 2 are mine. Inference #3 was my interpretation of Josh's inference. I seek to spark a conversation as to when it may be logical for an agent to accept a listing initially priced over its market value.
I hypothesize a singularly specific situation based on Sanjay's question. - Say you are aware of a buyer (represented by another agent) who wants a particular type of house, but insists on receiving a 15% discount from its list price. You meet with the seller who suggests a $999K list price. Your CMA says $849 is actual market value. - You agree to list at sellers price for initial two weeks, lowering if no offers. You contact the agent for the buyer in question. Come look at this new listing! Deal happens that would not have if house had been listed at "market value"! - Makes everybody happy!
There have been hundreds of posts as to why listings should be priced to market. - Please don't post any of those in this thread. Lets hear some justifiable, viable reasons to overprice. - I will also post a companion question for why would it make sense to price significantly below market
0 votes Thank Flag Link Sun Aug 5, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
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I want to clarify the stats that I pulled (I had to go back and look at them to confirm for myself...)

The stats on SP/LP were not split out by zip. I pulled comps for a certain price range to look at the relationship b/t LP and SP for that price range across all of San Ramon since April 1.

The year over year data for the 2 San Ramon zips only showed the delta in median sold price.
Web Reference: http://www.BayAreaREI.com
0 votes Thank Flag Link Sun Aug 5, 2007
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