This time last year, buyers were tripping over each other trying to beat out the competition for a limited number of listings. It really didn’t matter if the house was priced accurately. The offers just seemed to roll in. The listing agent’s primary job, often became advising the seller on what terms they could pick out of the multiple offers so that they got the best deal possible.
Markets change. Portland’s real estate market hasn’t tanked like it has elsewhere but now sellers are needing to compete for buyers and that starts with accurately pricing a home. That’s something that zillow and other nonhuman resources can’t do at this time. Overpricing a home is the death of selling it. It is hard to get past the old days where pricing was done by looking at recent comps, adding a little, then adding some more. Odds were that the offers would roll in.
Overpricing in a market that is more tilted in the buyer’s favor risks the following:
1) Buyers never look at the home.
2) The buyers that do look think that it is overpriced and never look again, even after price reductions. They emotionally move on.
3) By the time price reductions bring the price down to what the market would have accepted, the listing is stale.
4) The price reductions may go straight below what the home would have sold for if it had been listed lower in the first place. Listings are best the first few weeks when the listing is fresh to everyone, not just new buyers entering the pool.
5) Price reductions show in the listing history. Enough reductions may make the buyer think they are desperate.
Just because a listing agent recommends a high price that sounds good doesn’t mean they can get it sold. Where the lowest bid for work performed isn’t always the best bid, the highest suggested listing price isn’t necessarily the right price for the home.
So true. I’m hearing so often, “..but they can always make an offer”. NO, NO, NO. Buyers will NOT make an offer on something that they think is overpriced. Why? They do not want to insult the seller. Remember, people are basically good.
Price AT market. You don’t have to accept an offer if it’s too low. The idea is, to GET an offer!
Good luck Portland!
good post. I would rather lose a listing than take it if it is significantly overpriced. I tell sellers flat out that some people will take an overpriced listing just to put a sign in the yard and try to pick up buyers. Others take these listings our of desparation or greed. I’d rather walk away honest and ethical.
One of my favorite lines is, “We sell listings. We don’t collect them.” An overpriced listing is just something to throw marketing dollars at with little hope of return.
I accidently deleted pdxrenter’s comment. Hopefully he or she will repost. One of the ideas in the post was that relisting a house to refresh it in RMLS is or should be considered fraud.
I don’t know that it is fraud but it can be misleading and the use of the information is critical.
If a listing has a three month term and it expires, can the listing be renewed after expiration to make it a new listing. I’d assume so. Is there a difference if a six month listing is canceled and relisted after three months?
The listing history should show any failed offers. The listing agent has four days to change an active listing to a pending listing in the computer system. If a proprety has a lot of back on the market enteries, extra precaution might be in order.
What the listing history cannot provide is a basis of what an offer today should be based on previous sold prices. The house sold at its market value on the day it sold. It has no bearing on market value today.
Once-upon-a-transaction, I was fired by a buyer because I didn’t tell her them that the property had been listed, sold in three days, sale failed three days later and was put back on the market at a higher price. They belived that the fact was material to the value of the house that day.
The history can be valuable, but you have to know what it means.
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