Overpriced Listings - Why Real Estate Agents Take Overpriced Listings

To Secure the Listing and Blow Away the Competition

• Sometimes It's a Deliberate Lie.
  As a seller interviews each agent, often the estimate of value creeps upward.
• Maybe the first agent knows there will be two other agents competing for the listing, so the first agent names an astronomical figure. The second agent, upon hearing the first agent's price, beats it.
  The third agent comes in higher yet.

  A seller who choose an agent based on which estimate is highest is the ultimate loser.
  
  Think of a long line, Where in line would you like to be?
  Most will say in front of the line.
  When selling a home you will want to be first in line to sell, find out how!
   Listing Information

  Yet almost every seller operates in this manner. It's a shame because so few agents take the time to educate sellers that other factors such as marketing plans and the agent's negotiation abilities are far more important than estimate of value. The comps speak loudly if anybody looks at them.
  Ultimately, the market place establishes value.
   

• Sometimes the Seller has Unreasonable Expectations.
  This still doesn't excuse the agent from explaining how appraisers determine value.
  Here's an example.
  A home came on the market on a great street in a desirable area, but it was priced $100,000 too high. When asked why, the agent replied, "I know it's overpriced, but I would have lost the listing to somebody else if I didn't agree to that price."
  Turns out a home two doors down sold for a high figure, but that home had been meticulously maintained, and it boasted a newly high end remodeled kitchen with top-of-the-line appliances,
  newly remodel bathrooms, real wood floors and travertine tiles  with a seller contributions of 6%.
  By comparison, this home was a fixer, with wall paper, but the seller insisted he could get the same price as his neighbor.

Free Advertising for the Agent

Every "For Sale" sign advertises the agent's company and the agent. Many signs contain the agent's Web site and cell phone number. Some even sport a large color photograph of the real estate agent.

Think of it like a giant billboard for the agent. Listing Information

If the home is located on a major thoroughfare, all the better. Probably thousands of drivers pass the sign each day and will see that agent's name. And after the sign post is in the ground, it's not costing that agent one thin dime to leave it there.

Agents Find Buyers Through Listings

• Sign Calls.
  If a buyer wants to find out the price of a home, typically they will call the agent's cell phone number and ask. Agents who are on the ball will try to recruit that buyer to work with them, providing the buyer is not already working with another agent.
   
• Open Houses
  Moreover, agents can hold an open house and find buyers that way as well. If the buyer is not interested in the home -- and once they find out the price they won't be -- the agent is then free to show the buyer other homes.
   
• Newspaper Ads
  An agent with an overpriced listing often won't put the address in the paper but will list the details along with the price. That way, buyers who can afford to pay that amount will call to inquire. Now, all an agent has to do is suggest other homes in that particular price range that are worth what the seller is asking and he/she's off and running into escrow on another transaction. Not yours.
  
   

  Don't fall for the Traps Order your Free DVD - Pricing your Home To Sell First Name* Last Name* Email* Please Select the DVD of your Choice:* Prepare Your House to Sell Pricing Your Home to Sell Selecting Your Real Estate Agent Address:* City:* State:* Zip Code:* Preferred Phone:* Cellular: Evening Phone: Fax: Best Time to Call:* AM PM Are you Looking to Buy or Sell?* Buy Sell Both Buy and Sell Comments: Real Estate Agents Hope for a Price Reduction Even if an agent knows he/she is taking an overpriced listing, he/she might be telling herself that when the home doesn't sell within a few weeks, he/she can persuade the seller to lower the price and then earn a commission when it sells. So he/she justifies her actions and accepts the listing. Except that studies show that interest in a home typically wanes after a few weeks, so there are fewer buyers for that home when the price falls. Buyers also think there is something wrong with a home that doesn't sell right away or they worry the seller dropped the price because a major defect was discovered. Price reductions hurt. They hurt the seller, and they often make a buyer wonder how much lower the price could drop. So, a buyer will often offer even less after a price reduction. Conclusion: Choose your agent based on honesty, ethics, experience, competence and marketing, and don't chase after those tossing around pie-in-the-sky numbers.