Post by Steve HorrilloPost by VThe point you made that
I *strongly* disagree with is that you'll only get results if you sell under
market value. I do not under-price homes nor does anyone in our office that
I know of.....we look at the same MLS system to pull comps as a full service
agent does. I refuse to list if it's grossly over-priced just like you or
anyone here probably has. My sellers have input as to where to price the
home, but I still reserve the right to accept the listing or not.
I find it hard to believe you walk away from overpriced listings. It's their
home, they have the right to at least try to sell it at the price they want.
They may need to sell it at that price or they won't have the money to
accomplish their goals or pay off the liens on the property. If you did a
Net Sheet you might discover that they have no choice but to over-price the
home. Do you do a Net Sheet? Do you know how to get a lender to take a Short
Sale?
Realtors, as part of their sales pitch, often use the rationalization that
if the owner initially puts the price too high, "they miss out on the
initial "buzz" that's created among the Butyer's Agents. That's true if you
don't have any skill beyond what the average Realtor has. At any time you
can cancel that listing and republish it with a new price, pictures and MLS
Number. This causes a whole new set of emails to be sent out as well. Not to
mention you should send out emails to all the Agents in your area. When I do
that I get 20-30 responses that I would ordinarily not have had. Do you have
a method for bulk emailing fellow agents? My list is 50,000 and growing.
When your client's home gets shown do you follow up with the Agent to see
why they didn't put in an offer? Do you offer them ways to try to compel
their client to buy? Do you try to get the seller to sweeten the terms
rather that lowering the price.
They also rationalize that if it's too high price the house won't appraise
and buyer won't get the loan. This may be true if you don't know how to
market the home properly. It's a number's game. The more potential buyers
you have, the greater your chance of finding someone who has no problem
putting 20-30% + as a down payment. If you're not skilled at influencing an
appraiser. If you don't have a good mortgage broker. If you have a scarcity
of buyers. Then yes, you need to compensate by lowering the or the price the
listing.
Like I said in previous posts. I would routinely put the home in the MLS and
in the For Sale By Owner system. At least 3% higher in the MLS. The MLS
consistently out performed the FSBO advertising. To not put them on the MLS,
you're simply getting their business by appealing to their innate greed. As
a Realtor you should know by now the MLS is the best way to go. If you have
a FSBO advertising system set up then use that too and price it lower in
that system. But to not put them on the MLS when you have it at your
disposal is pure negligence.
I started out at a company like yours. I too rationalized away the truth
that was staring me in the face. But if you have any sort of conscience
you're eventually going to become disillusioned.
In sales "the drop" is a method used by sales people who have no other
negotiating or sales skills. Drop the price. Drop your commission. Appeal to
the sellers greed. It's the easy way out. That's the only thing an unaided
FSBO has going for them. As a Realtor you have a lot more tools at your
disposal. You are not acting in the best interest of your client if not use
everything you have at your disposal.
With all due respect to your experience and expertise, I just don't buy what
you're saying. First of all, YES -- I have walked away from over-priced
listings. Why on earth do I want to price a home $30-$50k over it's comps,
MIS-LEAD the seller and tell them I can sell it, only for them to get upset
with me 3-5 months down the road when the house doesn't sell -- all the
while wasting MY time and my brokers money?? Net sheets mean nothing if you
know that the home isn't going to fetch what the seller is wanting to ask.
I find it hard to believe that you're able to sway an appraiser on the value
of a home. I don't know where you live, but around here appraisers have all
sorts of heat on them to be on the level... and very few IF ANY are willing
to fudge a report. That was very common back in the day... and you're
dating yourself by saying it can be done. Not so much anymore and good for
them!!! And -- GREAT!! Lets say you can convince an appraiser to fudge
the bottom line, what about the underwriter!? Last year alone I had two
underwriters *reject* the appraisal because they didn't feel the comps were
sufficient supporting documentation... both times it was on a 100% LTV -- I
hate 100% LTVs, but the market is so overly saturated with first time
buyers, that its more common to find those buyers than not. That's just the
way it is.
I also encourage my sellers to dual-price (list higher in the MLS) but for
whatever reason, some still don't choose to. As I mentioned in my previous
post, I always encourage my sellers to list in the MLS because their home
will PROBABLY sell faster. To say that it definitely will may be inaccurate
because you never know for sure. Believe me, I'm not here to say that FSBO
or limited service without the help of MLS is always the way to go..... FOR
SOME, yes... it's not necessary. I have had listings sell just fine without
it....but its not for every home -- mostly those priced outside of the first
time buyer range or those homes that are tucked away in the county that
don't have a lot of visibility.
"if you have any sort of conscience you're eventually going to become
disillusioned"?!?!?! I cannot rationalize making 3-6% on a $300,000 home.
Highway robbery!! But if YOU can sleep at night taking that much of
someone's hard-earned equity -- more power to you. I choose not to.