About two years ago I was interviewed to sell a horse property here in the Barrington area. The tough discussion was, as it always is, pricing. I arrived with all the proof in the world that the property would sell at a price in a set range. I won’t be disclosing the address or the pricing strategy I gave the sellers as that’s not fair on them. Why? Because they are still on the market for sale.
Suddenly I see it’s listed with another agent. They had decided to sign paperwork with another agent and I never got a chance to follow up. Once listed with another agent I cannot call them to discuss their sale plans. I had showed them the bottom and top end of comparable sales, they had now listed higher than the best comparable sale, in a declining market. I am astutely aware of the sign outside the property as I pass it almost everyday going to and from work.
The funny thing was I had already sold another horse property just around the corner, one that this same new listing agent had failed to prior to me, due to over-pricing, so I guess I was not surprised. My sale of that property was announced with some postcards and that’s why these sellers had called me. Apparently it didn’t count for much. Oh well, I don’t want over-priced listings. They are a drain on my time and energy, and add a huge amount of stress to my life when sellers think it’s my fault their property has not sold. (How do I know this? Yes I once made the mistake of taking an over-priced listing. I did manage a sale but it took a lot longer than it should.) That experience was not a pleasant one.
Fast forward to 2014 and as I was driving down my daily route I noticed the yard sign had gone. The listing had failed to sell and was cancelled a couple of days later. During the listing period they had made one single price cut of about 1%. It seemed perhaps they were not that serious about selling. Two days later a new sign goes up and the new listing with a different agent. Now they have listed at a price I suggested 18 months ago. The problem they have is they wasted 18+ months being listed at a price too high. Now the market has recovered a little, but they have neighborly competition also listed for sale as more sellers come back to the real estate market.
Lest we forget, buyers today are also a pretty savvy bunch. They’ve seen this property for sale for a long time. It’s labeled stale. They can only wonder what might be wrong with it, likely dismissing it out of hand. For the sellers it’s an up hill battle.
Our market recovered well here in Barrington in 2013 but I don’t really see prices rising in general. There are pockets of value increases and pockets of value decreases. After all the first rule of real estate is location, so the best locations should see increases first. The older homes still get older, the newer are always more appealing. We’ve got new construction nearby too as builders have come back to the market. I think these sellers may be in as tough a situation now as they were 18 months ago, but for different reasons.
As real estate brokers, aka agents, we are all allowed to run our business as we see fit. Some agents or brokers may choose to take over-priced listings and you might wonder why. There is a reason and it’s called “Buyers”. It’s a known fact that by having listings you can attract buyers. But tell my how or why that is serving the best interests of any seller. If I list a property I am not interested in “grabbing” buyers from it, I actually want to sell the property.
So consider carefully your pricing, in a declining market you’ll be forever trying to pin the tail on the donkey. In an inclining market no home will sell if it’s over-priced. Your competition will out sell you, time after time.