Just Say “NO!”
Here’s the kicker. For homes like this in my market, during the past 12 months, the median price per square foot for sold properties is $56.48 per square foot. I’m an appraiser; we tend to think in units of comparison. It works for houses like this, where the lots are fairly uniform in size, and the homes are all of the same vintage. This house was listed for $101.90 per square foot. In actual dollars, it was listed for $95,000 above the highest comparable in its pool. Why would an agent do this?
I wish I could say it was a new agent, who doesn’t know any better, but it isn’t; it’s a seasoned agent. I know this agent, and if you asked her why she listed this house at this price, she’d likely say: “Oh, I know that’s way too high! But, that’s what they wanted to start at! You know how people are, and well, you can always come down but you can’t go up. It is really beautiful inside. And, it only takes one person, right? And anyhow, what was I supposed to do?”
My head aches! All those time worn phrases in one place. First of all, if you can’t defend the price you listed it for [“I know that’s way too high!”], why did you list it at that price? Second, who’s the professional in this transaction? “They wanted to start there.” Well, what do they know about prices and our market?—that’s supposed to be the agent’s job. Then there’s the time worn notion that you “can always come down but you can’t go up”. Yes, and the truth is that overpriced properties get market aged, and end up selling for less than they would have had they been priced right initially. Here’s what is already happening: buyers of homes like this, who have undoubtedly given their parameters to various real estate agents, have probably set their upper price at $140,000, maybe $150,000. [Hey, it is a small, rural town!]. So this house won’t even show up in those automatic emails agents have the MLS send their prospects—it will be too high. It is in a visible location, so buyers will drive by—and call for a price. The silence (on the part of the buyers) will be deafening. When a prospect calls on a sign, and can’t wait to hang up, that’s a reaction to price. The agent will put it in MLS, realtor.com, the company website, and whatever other websites she uses. If she’s smart, she’ll start tracking the hits. Lots of hits + no showings = negative reaction to price. In their haste to make certain that they “didn’t leave any money on the table” by pricing too low, these sellers have cost themselves the commodities more valuable than any “money on the table”—time and money. The money is obvious; it won’t sell at that price, and when it finally sells, it will undoubtedly be market-aged which we use to describe a house that ultimately sells for less than it should have—because for the past umpty-ump months, buyers have been driving by, seeing the sign grow roots, and saying: “I wonder what’s wrong with that house?”
NAR stats say sellers lose 1% a month of their value in terms of carrying costs: insurance, maintenance, taxes. It’s darn near October, and I’m in North Central PA. We have about a good month left of selling time, then the holidays—Thanksgiving, Doe Season, Buck Season, Bear Season, Christmas and New Year’s—take their toll. These hapless sellers would have done themselves a huge favor to list this place realistically and take the first offer (because the best offers always come in first—but you knew that, didn’t you?)
Finally, the old saw: “It only takes one person.” I wish I had a dime for every time I’ve had this trotted out by a seller, who thinks I have a direct line to rich and stupid. Because, that’s what that really implies—rich enough to pay too much, and stupid enough not to care. Outside of professional sports and movie stars, where do you find rich and stupid? And professional sports figures and Hollywood stars are hardly flocking to North Central Pa.
I saved her last comment for last, because it is the best. I’ve heard this from this agent (and others) many times, always in a plaintive sort of wail: “What was I supposed to do?” As Nancy Reagan said so eloquently: “Just say NO!” NO, I won’t over list your house; NO I don’t think you know enough about this to price it; I’m the expert; NO, you won’t end up coming down the ‘little’ you think you’ll come down—if you start there you will take a bloodbath on this property; NO, I don’t think I know that one person who will pay you $95,000 more for this house than the most recent, most comparable house, and NO, I have a professional reputation to think about; I can’t afford to have my name on a listing this overpriced. Just say NO.
Melanie J. McLane, ABR, CDEI, CRB, CRS, ePRO, GREEN, GRI, RAA, RSPS, SRES, SRS. Inducted into the REBAC Hall of Fame as a Trainer in 2008. Certified AQB USPAP Instructor; Real Estate Speaker and Trainer; licensed real estate associate broker and Certified Residential Appraiser in Pennsylvania. For listings and sales, contact me at Fish Real Estate, 570-326-1561 or 570-660-9671 direct. For training and appraisals, contact me at 570-660-9671.
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