I am surprised at the fact that many sellers act surprised when I tell them we're in an historic bad real estate market. So many reply, "Really?!", almost like they're shocked to hear this news. I don't get it, just turn on the television, read a newspaper, go on the Internet, and you'll read all about the bad economy and the bad real estate market. Buyers sure know about it!
Why Are Some Agents Acting So Positive?
Many agents are taught to be positive and don't mention the fact that they're having a bad year. NAR is advertising a campaign to give people hope - it's a great time to buy, yada, yada, yada. Of course, that mantra is true - it's a good time to buy, although some professionals say keep waiting as prices will continue to go down and we haven't reached the bottom yet.
I Was Positive in 2007
2007 was a record year for me, when many agents were starting to feel how the market was declining. Last year was the final straw for many agents, who quit the business or got other jobs to supplement their waning real estate incomes. Yet I did great! So good that I figured it would naturally carry over to 2008. But it didn't.
Homes Will Sell If They're Priced Correctly
I've still got plenty of listings and some are selling, like a recent Orland Park home for sale. It isn't closed yet so I can't discuss pricing, but I can say we started out at $325,000, which was a good market value based on a Comparative Market Analysis (CMA) I did at the time of listing. We had lots of showings and it was always at the top of the buyer's list. But buyers were writing contracts on other homes. We started making reductions, first to $318,000, then to $315,000. We were basically "chasing" the market.
As prices continued to decline, we were reducing price a step behind. Of course, as an experienced REALTOR, I try to get top dollar for my sellers. But in a declining market that isn't always easy to determine, especially when preparing a CMA with comparable listings from as far as 6 months earlier.
Also, once price has been established and marketing begins, the seller has that price in their heads, whether the market will bear it or not. It wasn't easy to continue to get reductions. The sellers were getting upset, even though they now realized that our entire economy was at risk. They didn't realize what was happening when we first listed the home.
Finally, I got them to agree that based on feedback, the competition and the slowdown of showings we should probably drop to $300,000. At that point they were aware of the deteriorating market and agreed. That's when we started getting showings again and finally an offer.
Is that where we should have been from day one? The comps showed us otherwise, and I'm sure the sellers would not have listed at that price at the time. This was a great brick home that was lovingly maintained but also had original carpet, kitchen & bathrooms that are now dated. Excellent condition, but dated. And that was the problem with the higher prices.
Sellers Still Don't Get It
I've been going to listing presentations recently and am giving sellers the truth - if they list too high they will not get a sale and might not even get a showing. Some understand, many do not.
They'll nod their heads and show their displeasure at the current market and the market value I provide them with. After everything I tell them, some still want to price their property too high. They agreed with me as I showed them the comps, but it either didn't really sink in or they thought it didn't apply to their property.
I won't take those listings, especially in our current time of year, which is always slower than our busier spring to summer season. In fact, I work with sellers to give them other options, like renting their place out or possibly asking their mortgage provider for a short sale. I have even talked sellers into staying in their homes (if possible) and wait until the market recovers. I do explain to them that if they're "moving up" they might come out ahead in the long run as the home they're buying will be reduced at a higher dollar amount than any loss they might incur by selling their lesser priced property.
Other Agents Will Take Your High Priced Listing - For Some Reason
If I cannot help them, I tell them. It is up to those sellers to try to find another agent to list their property at the price they want. And that has happened on many occasions.
- One seller listed her townhouse with another agent for $55,000 higher than my suggested list price and the property has been on the market for months without a sale or even a price reduction. I gave her my blessings as I would not take the listing at the price she "needed." Buyers don't care what a seller needs.
- Another townhouse owner listed her property, that had been up for sale already with another agent, for $90,000 higher than what the CMA suggested. Again, this property remains on the market and has been for sale for a total of 9 months so far.
- Another couple listed a home for sale for $45,000 higher than recommended and I found out they didn't have one showing during their entire listing period! The listing expired and they have not relisted it so I can only assume they're waiting for the market to recover. I will not take their listing at the price they had it at and insist they need in order to move foward.
I could go on and on. For me to take an overpriced listing is just asking for an unhappy seller. I don't understand why other agents go ahead and take these listings. Unrealistic sellers will just hop from agent to agent until they are finally convinced to reduce their price and get to a price that is finally correct.
Many times I am the agent that finally gets through to these sellers. They've now heard it from other agents. They've seen firsthand (expired listings) that their higher price(s) did not work. They've received feedback telling them that they're priced too high. In these cases, it was perfect timing when I gave them my presentation.
But when I'm the first agent on the scene, I am finding it more difficult to get some sellers to understand the reality of today's slow Buyer's Market. I recently left a listing appointment where the seller seemed to agree with my market value based on the comparable sales. But when we talked about actually listing her property, she then said she needed to list at around $29,000 higher than the price I suggested. I showed her the facts but she didn't see them. I wish her the best.
If you're a seller that needs to sell in today's market give me a call at 708-536-8200. I will give you the facts so your property will sell, not just sit on the market for months or years. Remember, a house that sits on the market too long becomes a stagnant listing. Buyers think there is something wrong with the property when all that was wrong was the price. Or fill out the quick Instant Online Market Value form to receive a free Comparative Market Analysis on your home.