That is a good question, and there is no simple or uncomplicated way to for me answer this question in the current market unless I add some word descriptors somewhere in the original question.
For a couple of years now I have been posting local housing market reports that have shown a clear trend to the 'down' side of things. Sales in units are WAY down, and prices of sold listings are also WAY down. Those are the facts.
However, many people have 'opinions' that often are contrary to the 'facts'. Currently in my line of work the best example I can give is when a property owner has the opinion that he/she can sell their property for much more than what the current market will allow. As always, I can and do respect the opinions of all the fine folks I've had this kind of conversation with. Opinions are allowable and everyone should have them.
For the last year (or longer) I have been presenting local housing market facts (the same facts I share on this blog) to the many fine folks that have called me to perhaps hire me to list their property. Now in fairness, the market turned around on me in a darn quick fashion and I admit that I wasn't ready for it in all cases. Often I'd take listings for a higher asking price than I thought was going to attract potential buyers. I'd acquiesce to my prospective listing clients (who became clients), and rarely did it work out well for the client or for me as a business person.
After learning some lessons the tough way, I stopped taking listings that I felt would be at a price level that wouldn't attract ready and willing buyer's. Now I've never been a doctor (nor should I be confused with one... ever), but at times over the last couple of years during listing appointments I've felt like I was giving really bad health news to a patient... sending the patient into a panic and a quest for a second professional opinion. Since I DON'T hold a gun to the head of prospective listing clients during listing appointments and force them into signing listing agreements (just not my style) I didn't mind when those folks told me they were going to seek out another opinion... in fact I encouraged it.
Did I give away clients?? Did I run off opportunities to make revenue for my business?? In my opinion (like I said earlier, everyone is entitled to their own opinion)... the answer is no.
For a professional Realtor, overpriced listings comes with one guarantee... a future conversation with the client about price reductions. This kind of conversation comes complete with another round of 'opinions' and I find the whole thing very unpleasant (the conversations) and I imagine that the client finds them even more unpleasant (insert curse words here if you are a seller... it's okay). Conversations about price reductions lead to uneasy feelings and practically sleepless nights... not good for the blood pressure or the stress level... and that is just on my end of the business.
A fellow real estate blogger, Jay Thompson (the Phoenix Real Estate Guy), shared a post from some calls he took over the weekend. See the whole post here, but I'll copy the pertinent stuff following...
Three calls came from people wanting us to list their homes.
Cool! Three new listings in two days!
Not so fast…. I turned down all three listings.
Why would a real estate brokerage turn down listings? My old Century 21 broker would be mortified. “Just get the listing!” was the beginning of a common soliloquy there.
But, pray tell, exactly what is the point in taking a listing that can not be sold? All three of these homeowners called knowing exactly what price they wanted to list their home for. They were off the mark (on the high side) by $60 – $135K.
I tried to help them understand the current Phoenix real estate market conditions. I supplied data, I waxed eloquently about why their homes would never sell at those prices.
One snapped into reality and decided to wait to list. We’ll stay in touch and when market conditions permit them to get what they want, they’ll list their home. That is of course, assuming nothing else changes in the 12 – 36 months (or more) that could take.
Two of the would-be listers were adamant that there homes were worth 20 – 40% more than what I was telling them. One home had been on the market approaching one year, and we would have been their fourth agent. One has “only” been listed for six months and the owner is growing weary of his agent telling him to reduce the price. They’ve had one showing in those six months.
They will be finding another agent that will “List their home for what they want”.
I’m sure they will have no trouble doing just that.
Oh, we could have taken the listings. It would have given us the opportunity to plant our sign in the yard, and maybe a few inquisitive buyer-types would call. We could then hook them, reel them in, and have new buyer clients.
But I prefer not to have my signs rotting away in a yard, in the hopes of stumbling across a buyer client. There far more efficient ways to get new clients.
Now Mr. Thompson recently started his own brokerage and that comes with tons of risk (especially in this kind of market... and yes the market is tough in Phoenix too), but I bet that turning down listings like that really isn't that hard of a decision... even for a new broker. Sure, his shiny new real estate signs placed in the front yards of overpriced listings would offer advertising benefits... for his brokerage... but I think he realizes that taking overpriced listings doesn't benefit the client most of all.
I also think that Jay has it right, out of every three calls like this... one hopeful seller will get it and not list their property at this time... while the other two will find a broker that will end up listing their property -- and that broker will acquiesce to the price opinion of the seller.
Folks, particularly folks who are thinking of selling property, as long as there are nearly four new sellers that enter the market the same month that maybe one buyer actually agrees to purchase a property... pricing the property to the actual price point of the market is the very best way to attract a ready and willing buyer.
Do I feel your pain sellers?? You bet I do... sales are down and mere
opportunities for sales are down. I realize there are some things a seller can do to enhance their chances to attract buyers, but all the repainting and re-carpeting and home staging in the world won't amount to anything but spent money if the home is not priced really close to the current market.
The old cliche that states the three most important elements of real estate sales are
location, location, location is wrong in a down market. Location can stay in the list of top elements, but price is first on the list right now.
Price, location, and price is it... for the time being until the market show some balance between buyers and sellers again.
My next post is going to be about a new promotion I plan to run... to attract more listing business. That is right... listings. Do I wish I had more listings was the original question and the title to this post... and the complicated answer is YES I want more listings. Check back to see those complications next time (
if you are a seller and can offer a price that is concurrent with the market I will save you hundreds and maybe even thousands of dollars on the sale of your property).
