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We have a problem. A serious problem. Okay, we have lots of serious problems, but this one is seriouser than a lot of other serious problems. The problem with our problem is I have to be careful talking about our problem because I wouldn’t want anyone to think that I’m trying to meddle in anyone’s business. However, this is such a big problem that it can’t be ignored. So it’s analogy time at the ole blog.
Let’s play a game. It’s called Guess the Price. I’m going to offer something for sale and you have to guess the price I’m willing to accept. Sound familiar?
It doesn’t really matter what I’m selling, but let’s say that I’m selling my collection of Brady Bunch trading cards (except the Marcia cards, she’s dreamy). So guess what price I’m willing to accept?
Wait… I’m going to help you. I subscribe to the TCLS, the Trading Card Listing Service. This is a service of the AGLA, the Association of Geeky Losers of America. AGLA offers the TCLS to give its members an opportunity to advertise trading cards they want to sell.
So here’s how I’m going to help you guess the price I’m willing to accept for my Brady cards (less Marcia): I have listed them on the TCLS for $50. I know what you’re thinking, $50 for Brady cards? Who would sell them for such a low price – even if they didn’t include the Marcia cards?
Here’s something else you need to know: I have to sell these cards because there’s a new Steve Erkel bobble-head doll out that I want to buy. I am really quite upset about not having the money to buy the Erkel doll. So you might say that this is a distressed sale.
So make a guess. $40? $25? Are you kidding? The Erkel doll costs $250! And I’m planning on using all of the money I get from the Brady Bunch cards to buy it. Are you starting to see the problem with my game? I listed them for $50, but I have no intention of taking less than $250. Why would I do such a thing?
The AGLA is all over me about this. They call it false advertising, which it is. Geeky Losers have a Code of Ethics that states that I won’t misrepresent myself or my trading cards (one guy tried to impress us by saying he had pictures of every model of Apple Computers ever made, but he lied. The Geeky Loser Advisory Council made him hand over his slide ruler and use a calculator for a whole month!).
It makes no sense to list my cards for a price I know is too low to cover the cost of the bobble-head. Not only does it make me look bad and ticks off potential buyers, listing it in the TCLS like that makes all of the geeks think that all trading cards for stupid shows from the late ‘60s are only worth that much (you should see the emails I get from the Beverly Hillbillies geeks).
I’m making light of the problem, but our situation is very, very serious. Read the email we received from one broker. His is not the only story, but he sums things up very well. Ed Smith conducted a class on short sales in early December. He said that most of the time low prices are a result of good-intentioned agents who want to help the sellers and think that artificially low offers will pique buyers’ interest. But all it does, he said, is clog down the system and cause the whole process to take much longer. He estimates that 75% of all offers being submitted to lenders on short sales are unacceptable. Talking to Ed, I got the impression that most acceptable offers are within 20% of fair market value, but when I pressed him on this he said that there were a lot of other variables the lender considers when reviewing offers.
Florida Association of REALTORS®’ legal counsel Randy Schwartz believes it could be putting both the listing agent and the seller at legal risk. In answer to questions about this subject, Randy said that a case could be made for misrepresentation and false advertising when a licensee lists a property for a price that the licensee and seller know is not acceptable. The seller might also be on the hook for civil damages, according to Schwartz.
I want to be clear: nobody is trying to dictate what a property should be listed for or even suggest that we should all do this-or-that with listing prices. But considering the suspected intent of the action as trying to help, considering the way the situation is viewed by the public, considering how this is clogging up the process, and considering the way the practice creates risk for the agent and seller, it only makes sense that everyone go back to the basics and use common sense to get the job done.
We’ve all got to put our best effort into every aspect of our business or we will see our profession go right down the tubes. It won’t be because of a slow market, it will be because using a Realtor in a real estate transaction will be viewed as a frustrating, risky, and angry experience. Who would want to add grief to their lives if they didn’t have to? And trust me, you can’t make a living selling Brady Bunch trading cards – especially if you aren’t willing to include the Marcia cards too!
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