Knowing When to Pass (on an overpriced listing)

Realtors & Overpriced Listings

"I will not take an overpriced listing."
"I will not take an overpriced listing."
"I will not take an overpriced listing"
"I will not take an overpriced listing."

Four down, 496 to go.

There are many, many reasons it's a bad idea for a Realtor to take an overpriced listing.

Here are four of them (unfortunately, all gleaned from personal experience).

One. A homeowner who insists on an unrealistic asking price will blame you when their home fails to fetch it.

No matter that you did everything short of hire the Goodyear blimp to hover over the home -- to the Seller, it won't be enough.

They'll expect you to go broke buying ads; host endless Sunday open houses; and find fault with your marketing literature, photos, sales skills, work ethic -- you name it -- no matter how professional.

Contrary to popular myth, it wasn't Caesar but a Realtor who first said, "the fault, dear Brutus, is not in our stars, but in ourselves" (substitute "Realtors" for "stars" and "asking price" for "ourselves").

Two. Lack of cooperation. The flip side of the foregoing is that homeowners who see their home through rose-colored glasses see little or no need to spend time or money on things that undeniably make homes easier to sell, for more money (Realtors' generic term for this is "client cooperation").

That includes things like staging, fixing things, keeping the home sparkling clean (tough to do, but very important if you want to sell), and being accommodating about allowing showings (and then leaving for them!).

Three. It's expensive. For the Realtor and homeowner, both.

As the saying goes, "nothing kills a bad product faster than good marketing."

Driving a ton of traffic through an overpriced home is a waste of time and money, because prospective Buyers will inevitably be underwhelmed.

So, weeks (or months) later, when the home has been reduced to a more reasonable price, you'll need to do it all again.

Then, another axiom applies: 'it's easier to get prospective Buyers through a home the first time then to get them back in a second time.'

Of course, owners of homes that have been on the market too long discover another truth: you often need to discount below market value to get a deal done with now-skeptical Buyers.

Confronting that truth does nothing to help what by then is already a strained Realtor-Client relationship.

Four. It's demoralizing.

Selling a home that people want to buy is exciting.

There's a palpable feel to a home that's "priced to sell" (as they say): there's a buzz at the broker open; first showings kick in right away (some of which quickly progress to second showings); Buyers (and their agents) feel a sense of urgency that you pick up on.

All that energy creates momentum that gets deals done.

By contrast, trying to sell an overpriced home has all the energy of a . . . flat can of soda.

While Realtors are trained sales professionals, they're people, too. After awhile, trying to sell a home that's priced too high makes you feel like Sisyphus pushing a boulder uphill.

Instead of attending to an overpriced listing, you try not to think about it. Which isn't doing the homeowner or the listing any good.

Reality Test: Failing Grade

Twice in my eight years in real estate, I was so exasperated with a prospective Seller and their price expectations that I insisted that they view their competition.

So, I set up previews of 4-5 nearby, competing homes -- homes that not only were larger and/or in better condition, but had lower asking prices.

The would-be Sellers' reaction at the end of the tour?

Both were convinced that their asking price was too low -- and insisted on raising it!

Unfortunately, the cure for that mentality typically is market time . . . lots of it.

(There! . . . I feel better)