Pricing is the topic for today’s training session at 11 Pacific Time. It’s always been a favorite of mine. You see, I learned early on in my career as a Salesperson that the best marketing I could do for my sellers was to convince them to price their home as close to market value as possible. All the marketing you might do, all the fantastic, cutting edge promotion you might undertake, is meaningless if the property is overpriced. Excessive marketing does not make a home worth more. I know: it’s a simple concept, one that is pretty obvious. But it’s striking how many sellers don’t realize it.
(I recently watched Maria Powell doing a listing presentation. At one point she said to the seller, ‘I’m sorry. I really wish I could make your home be worth $400,000. But I can’t. The best I can do is about $370,000 — that’s what the Market Analysis shows.’ )
I have always been a strong advocate of NOT taking overpriced listings. I look back 5 years ago and see that overpriced listings took longer to sell and therefore gobbled up more of an office’s precious marketing dollars. Truth is: every day you have an active listing on the market, it costs you money. And that’s just the tip of the iceberg. Think about the aggravation of dealing with an unrealistic seller wanting to know why you haven’t sold her (overpriced) house yet. And what about your reputation? So what if you have the best deal in town if your listings sit and sit and sit, unsold.
I always urged brokers and salespeople to fight the good fight, do everything they can to get the seller to acknowledge reality and then, if a realistic price cannot be agreed upon, to get up and walk. Don’t take the listing.
Today, I have to modify that stance just a bit.
It is still clearly in the seller’s best interest to price the property properly and we’re all about taking good care of our sellers (and buyers), urging them to do what’s best for them. But ultimately, what’s in the best interest of the Broker?
Every week we ask top producers where their buyer closings come from. Over and over they say the same thing: sign calls, ad calls, Internet leads, Open Houses . . . in almost every case, the buyer comes to us because of our listing inventory. So it’s clearly in the Broker’s best interest (as well as the best interest of ALL the sellers whose homes we have listed) for the office to have as many listings as possible. Listings are the net we cast into the marketplace to capture buyers.
So, what’s really wrong with taking an occasional overpriced listing? Even an overpriced listing will generate calls, right?
Here’s my new point of view:
If you’ve fought the good fight, if you’ve made as compelling a case as you possibly can and the seller still wants to overprice (that’s overprice, not grossly overprice), I think you might take that listing if:
- You make it very clear you think it’s too high. By being clear when you take the listing, you eliminate the call two months down the road wondering why you haven’t sold the property.
- You set a date four to six weeks in the future to revisit the pricing issue.
- You ask every agent who tours or shows the property what they think of the price and you share that with the seller.
- You give the Seller a Listingbook account or sign them up for some other ‘First to Know’ program so they can see what other homes are selling in the neighborhood, how the competition is priced, etc.
As an agent years ago, I found it helpful to put my unrealistic sellers in the car and take them out to see the competition. They usually came back with a new appreciation for reality, especially if some of the competition were shiny new homes with flashy models.
Today, success in real estate is all about the buyer. Can you attract buyer inquiries and convert them into prospects and then into sales? Anything you can do to attract buyers is beneficial and nothing attracts them better than listings.