Chess Player, Home Buyer in San Francisco, CA

What should the seller do when the sale price is set super-high due to the listing agent's hype?

Asked by Chess Player, San Francisco, CA Mon May 19, 2008

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I'm assuming from your question that you're interested in buying a property, but you believe it's overpriced "due to the listing agent's hype."

If that's the case, first determine the property's true value. Get your own agent to run comps. Discuss them with him/her; understand what's being compared, and what the property's real value is.

Then, if you want to make an offer, do so. Don't worry about the listing price. That's irrelevant. If it appears that your offer is a "low ball" because it's substantially under the listing price, so be it. Don't worry about it.

Some who comment on Trulia will advise supporting your offer with documentation--the comps, for instance--to justify your price. And that's OK. Probably a good idea.

My point, though, is simply don't overpay for the property. And you don't overpay by knowing the property's value, and then sticking to that number.

Good luck.
0 votes Thank Flag Link Mon Jun 9, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
The Seller was possibly told what he wanted to hear during the time of meeting between seller and agent. If this seller would like to have a sale instead of a shiny nice listing post in his yard for months to come, I recommend he address this matter with his agent. He/She could also sit and watch a little film on youtube called "How to Sell Your Home in Black & White" it says it all!
Good luck...Delia 510-219-0962
0 votes Thank Flag Link Tue Jun 24, 2008
"And was it indeed priced much higher than you got it for?"

Yes; the difference approximately equal to a non-bay area home's worth ! :-)
0 votes Thank Flag Link Mon Jun 9, 2008
Don, we did just that. Now in escrow, waiting to close. Thanks for the input!
~~~~~~~~
And was it indeed priced much higher than you got it for?
0 votes Thank Flag Link Mon Jun 9, 2008
Hello I am a Realtor on Cape Cod with oldCape Sotheby's International Realty in Brewster.

Prior to listing a property, I prepare an opinion of market value, AKA "Comparative Market Analysis" for my client and my own edification. Utilizing statistics from recently sold properties that are comparable to the subject property (i.e., my client's home) and properties that are currently for sale or "active", I generate a report that suggests a reasonable listing range based upon current market conditions.

I always tell my seller that I do not set the price; he or she does, informed by the market information I have presented and their current circumstances. For example, some folks need to sell their property ASAP, due to illness, relocation, divorce, etc. Others may have the luxury of "testing the waters" so to speak with the current pricing--for say a few weeks.

In any event, as a seller's agent, I try never to list a property at a price in excess of a reasonable estimate of market value.

Perhaps you should ask your agent for an updated market analysis of your property. If he or she refuses, perhaps it's time to look for an agent who understands the importance of realistic pricing.

You might also pay a few hundred dollars for a bona fide appraisal by a certified real estate appraiser.

In any event, you should be driving the bus, not your agent.

Good luck
0 votes Thank Flag Link Mon Jun 9, 2008
Don, we did just that. Now in escrow, waiting to close. Thanks for the input!
0 votes Thank Flag Link Mon Jun 9, 2008
If the price is set super high, it is usually because the seller is asking for this price. Sellers who insist on this, are doing themselves a disservice. When the price is too high, there will very little buyer activity. Sellers should look at the comparable homes that are in the same area, about the same size and have the similar features. Both the sold and the active listings should be considered. Know what the buyers are willing to pay for a property like theirs and what the competition is priced at. Good REALTORS know that buyers purchase homes by comparison.
0 votes Thank Flag Link Mon Jun 9, 2008
Typically an agent will want to list at market value so that the home will sell in a reasonable amount of time. If the price is "super high" it is usually because the seller wanted a certain amount of money and the agent agrees to try to get it. Sometimes agents will "buy listings." They will tell the seller they can get more than another agent to entice the seller to list with them. This is also known as not telling the truth.

The best protection that a seller can have is comparable sales. Know the sales price of recently sold homes in your neighborhood similar to yours. A reputable agent should be able to furnish those comparables in an organized and understandable fashion. You can also know your competition by going to open houses or have your agent show you current listings in your area. You may have your home professionally appraised prior to calling agents to list your home. That will give you one more perspective on price.

Ask the agent to reduce the price! In todays market, price is a huge incentive to getting your property sold. If you are getting no showings the price is too high. If you are getting showings but no offers, the price is too high. I sometimes see sellers chasing the market down. They are always a bit higher than the market and the market keeps falling. Get in front of the market with a lower than market value and get your home sold before it loses more value!
0 votes Thank Flag Link Mon Jun 9, 2008
How would anyone know that it's not the seller who set the price? Granted that some listing agents may propose a higher price than market just to get the listing, but in the final analysis, it's the seller who makes the decision what price to set for his property. In today's market, pricing should be aggressive -- in many cases, this means pricing at, or even a tad below market price to compete with similar properties that are also for sale.

If the seller suspects that price is too high --- and thank goodness for that seller's astute observation --- then he should discuss with, and instruct the agent to prepare a summary of the most recent statistics to identify the trend, then reduce the price accordingly. Remember, the seller should drive this bus.
0 votes Thank Flag Link Tue May 20, 2008
Hi Chess Player. If you do not have an offer after 2-3 weeks price it accurately. The longer is stays on the market overpriced the worse it will be for you later on. I am surprised your agent is driving this. Either way it does not sound like a sound strategy. This may have worked in 2004-2005 .

If you would like an honest price opinion please let me know
Kind Regards
Michael Barron
First Team Real Estate
(714) 552-6817
0 votes Thank Flag Link Mon May 19, 2008
Set a realistic price. The extra marketing efforts won't be in vain.
0 votes Thank Flag Link Mon May 19, 2008
Chess:

Are you sure it is the agent driving the pricing? It is unusual to hear a situation where the seller wants to set a reasonable price and the agent refuses to do so. After all, the agent only gets paid IF the listing sells.

In reality, the seller sets the price of the home, not the listing agent. If the seller tells his agent to reduce the price, then the listing agent is obligated to do so. If the agent won't do it, then the seller should contact the agent's broker (since the listing is legally with the broker). If all else fails, the seller should consider changing agents.
0 votes Thank Flag Link Mon May 19, 2008
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