Do You Really Want That $2M Listing??

Homes That Don't Measure Up
to Their Asking Price

The quick Realtor answer to the question posed above?

"No, not if the home's worth closer to $1.3M."

That's especially true if the owner with the unrealistic price expectations also expects a drumbeat of expensive marketing over the course of a year (or longer) -- the average market time now for a Twin Cities home carrying that price tag.

To bridge those expectations, more Realtors who specialize in upper bracket homes are presenting such clients with a proposition: 'I'll run as much advertising as you want, but you pay for it.

When (and if) the home sells, the Realtor then credits back the client's marketing outlay at closing.

Ignoring the Asking Price

Mispriced Properties: Exhibit A

Where: 46xx 1st Ave. South in Minneapolis

What: Bank-owned (foreclosure) 3 BR/2 BA 1917 stucco home with 2,000 square feet.

How (much): asking price -- $72,900; sold price -- $130,000

When: listed -- 4/19/2009; closed --8/18/2009

In my post yesterday (Seller's Motivation: Is it Relevant?"), I made the case that the Seller's motivation (usually) isn't nearly as important as most prospective Buyers think it is.

Often times, neither is the Seller's asking price.

At one extreme, Banks selling foreclosures have been known to price ridiculously low to foment bidding wars (at least, you'd assume it was purposeful; the other alternative is that they truly have no clue. Hmm . . . ). See Exhibit A (above).

At the other extreme, lots of Sellers today have been known to pick asking prices that reflect, shall we say, "wishful thinking."

Either they've been in their home for decades, and are genuinely oblivious to how dated it has become, or, they feel the need to "pad" their asking price, to give themselves "negotiating leverage."

Unfortunately, that's not how it works.

Realtors (and appraisers) know that home prices are set exactly one way: by identifying the 3 best Comp's (similar, nearby homes that have sold the most recently), then doing a detailed compare-and-contrast between the subject home and each of the Comp's to arrive at an adjusted value.

"Realtor-Concierge" -- or "Realtor-Slave"?

Can You Say, "No Boundaries?"
How about, "Unprofessional?"

To reduce stress and temper the disappointment of lower sale prices — and also to keep clients from dropping them for another agent partway through a seemingly endless sales process — some brokers are significantly expanding their job descriptions.

Beyond rearranging furniture and decluttering, they take on jobs like plant watering, bed making and floor scrubbing; they check on homes when the owners are out of town; and sometimes even apply a coat of sealer to the driveway or do real estate-related paperwork.

During the two years that their two-bedroom Glen Cove colonial was on the market, Jenna Caggiano and Rich Peck would often return home after yet another real estate open house to find dinner ready. Their brokers — Natalie C. McCray and Eileen B. Heimer of Daniel Gale Sotheby’s International Realty — had cooked it during the event, between visits from potential buyers.

--Marcelle Fischler, "A Little Alfredo With That Listing?"; The New York Times (11/27/09)

Would you expect a lawyer handling an especially drawn-out case for you to start repairing things around your home?

How about your doctor cooking you meals -- elaborate meals, yet -- if your illness lingered?

Apparently, there are some Realtors who think that their job duties include helping clients run their households if the listing doesn't sell.

What exactly are these Realtor-Servants thinking??

"With all the things I have done for them, they stay with me. They will re-sign," said one agent interviewed for the article.

Job Confusion

That would make perfect sense -- if the object were to simply accumulate as many listings as possible, or to re-sign clients in perpetuity.

In fact, the Realtor's job is to sell their client's home (or at least procure an offer).

If a home has been on the market for an extended time, even in a soft market, one (or both) of the following is likely true: 1) the home is mispriced; 2) the home is poorly staged and marketed.

The antidote to #1 is a more realistic price; #2, another Realtor.

Realtor-performed household chores isn't one of the choices.