Comments on: Should Realtors take over priced listings? http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/ Austin Real Estate Blog Fri, 11 May 2012 17:13:15 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Robert Grunnah http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-77167 Robert Grunnah Thu, 23 Apr 2009 00:42:16 +0000 http://crosslandteam.com/?p=904#comment-77167 I think it has a lot to do with how agents value their time. If an agent has little business and a weak pipeline, they can accomplish the following by taking an overpriced listing: * Fill their idle time with something to do * Network with sellers and possible (though unlikely) buyers * Build brand recognition - however faint, having a sign and MLS listing is better than no signs and no listings However, once an agent's time is "saturated" and they're not sitting around idly, the above benefits are replaced by these negatives: * Opportunity cost - precious resources allocated to an unlikely sale, and taken away from marketing to truly motivated market participants * Wasted marketing resources - we probably spend $500 just to get a listing on the market if you factor in soft costs like Realtor dues, website marketing, gas, signage, flyers, etc. That adds up if you have a lot of listings that don't sell. Even worse are when you have a listing that gets 100 calls and showings and no offers - imagine how valuable that time would be spent working viable opportunities. * Lost credibility within the Realtor community. This is huge. I want people to see our listings and know from past experience that they're reasonably priced. That will cause them (and therefore their clients) to take new listings seriously, which will hopefully lead to decreased marketing times and quicker sales for our clients * Negative metrics. We can advertise to clients that we sell much quicker than other duplex brokers and for a much higher final sale price percentage (of listed) - because we've vetted opportunities in advance and only take the listings we can reasonably sell. That fact, in turn, allows us to market simply better performance metrics than the competition - thereby assuring a steady stream of future business. Summary - overpriced listings may make financial sense for agents just starting out, or for agents that have a completely dry pipeline. But for established agents with a reasonable pipeline, overpriced listings are a very likely way to damage your business. Robert I think it has a lot to do with how agents value their time. If an agent has little business and a weak pipeline, they can accomplish the following by taking an overpriced listing:

* Fill their idle time with something to do
* Network with sellers and possible (though unlikely) buyers
* Build brand recognition – however faint, having a sign and MLS listing is better than no signs and no listings

However, once an agent’s time is “saturated” and they’re not sitting around idly, the above benefits are replaced by these negatives:

* Opportunity cost – precious resources allocated to an unlikely sale, and taken away from marketing to truly motivated market participants
* Wasted marketing resources – we probably spend $500 just to get a listing on the market if you factor in soft costs like Realtor dues, website marketing, gas, signage, flyers, etc. That adds up if you have a lot of listings that don’t sell. Even worse are when you have a listing that gets 100 calls and showings and no offers – imagine how valuable that time would be spent working viable opportunities.
* Lost credibility within the Realtor community. This is huge. I want people to see our listings and know from past experience that they’re reasonably priced. That will cause them (and therefore their clients) to take new listings seriously, which will hopefully lead to decreased marketing times and quicker sales for our clients
* Negative metrics. We can advertise to clients that we sell much quicker than other duplex brokers and for a much higher final sale price percentage (of listed) – because we’ve vetted opportunities in advance and only take the listings we can reasonably sell. That fact, in turn, allows us to market simply better performance metrics than the competition – thereby assuring a steady stream of future business.

Summary – overpriced listings may make financial sense for agents just starting out, or for agents that have a completely dry pipeline.

But for established agents with a reasonable pipeline, overpriced listings are a very likely way to damage your business.

Robert

]]> By: Steve Crossland http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-77149 Steve Crossland Wed, 22 Apr 2009 20:30:04 +0000 http://crosslandteam.com/?p=904#comment-77149 > I’d think that discount brokers might have a slight edge in a slow market. No, they generally go out of business, in droves (check Arizona, California, Nevada, Florida) as seller opt for experienced full service agents in the tougher market. This is an observable fact. Steve > I’d think that discount brokers might have a slight edge in a slow market.

No, they generally go out of business, in droves (check Arizona, California, Nevada, Florida) as seller opt for experienced full service agents in the tougher market. This is an observable fact.

Steve

]]> By: Garreth Wilcock http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-77039 Garreth Wilcock Wed, 22 Apr 2009 05:54:33 +0000 http://crosslandteam.com/?p=904#comment-77039 A perfect explanation of the difference between helping someone list a home and helping someone sell their home. A perfect explanation of the difference between helping someone list a home and helping someone sell their home.

]]> By: Ray http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-77034 Ray Wed, 22 Apr 2009 05:04:41 +0000 http://crosslandteam.com/?p=904#comment-77034 New Austinite... The only people qualified to set the price of their property are the owners of said property. You call it high, they call it a price below which they have no need to sell. Who do you think is correct? It actually very simple. Of course if the market makers - which in the 'closed shop' system of licensed realtors and their exclusive access to the MLS still, but decreasingly so, means the realtors and realtor association(s) - refuse to acknowledge the real price of property then as we have seen the volume peters out. As soon as the market makers start meeting the real market i.e., advising their buyers to pay a bit more, and start accepting listings at prices the non desperate (99% of Austin sellers at least) sellers expect then volume will pick up.... and yes, the other factor is access to financing. Corrupt banks (and that's most of the TARP banks) need to wake up and start spreading the TARP funds out to customers before we can have any market.... Meanwhile local sellers are on strike but not worried. New Austinite… The only people qualified to set the price of their property are the owners of said property. You call it high, they call it a price below which they have no need to sell. Who do you think is correct? It actually very simple. Of course if the market makers – which in the ‘closed shop’ system of licensed realtors and their exclusive access to the MLS still, but decreasingly so, means the realtors and realtor association(s) – refuse to acknowledge the real price of property then as we have seen the volume peters out. As soon as the market makers start meeting the real market i.e., advising their buyers to pay a bit more, and start accepting listings at prices the non desperate (99% of Austin sellers at least) sellers expect then volume will pick up…. and yes, the other factor is access to financing. Corrupt banks (and that’s most of the TARP banks) need to wake up and start spreading the TARP funds out to customers before we can have any market…. Meanwhile local sellers are on strike but not worried.

]]> By: anonymous http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-77016 anonymous Wed, 22 Apr 2009 03:31:52 +0000 http://crosslandteam.com/?p=904#comment-77016 Steve, I'd think that discount brokers might have a slight edge in a slow market. The keep their investment in any listing rock bottom low and they may likely pickup sellers when they come to capitulation and accept a price inline with reality. Steve,
I’d think that discount brokers might have a slight edge in a slow market. The keep their investment in any listing rock bottom low and they may likely pickup sellers when they come to capitulation and accept a price inline with reality.

]]> By: Steve Crossland http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-76879 Steve Crossland Tue, 21 Apr 2009 15:23:26 +0000 http://crosslandteam.com/?p=904#comment-76879 > Discount brokers take listings just so they can get buyer calls. I'd be surprised if any Discount Brokers are that well developed in their thinking and strategy. Most I've dealt with are not competent at all, so it would shock me to encounter a really smart one because, if they were in fact really smart, they'd know that they have adopted a niche business strategy that collapses in slow markets. Steve > Discount brokers take listings just so they can get buyer calls.

I’d be surprised if any Discount Brokers are that well developed in their thinking and strategy. Most I’ve dealt with are not competent at all, so it would shock me to encounter a really smart one because, if they were in fact really smart, they’d know that they have adopted a niche business strategy that collapses in slow markets.

Steve

]]> By: Jim http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-76871 Jim Tue, 21 Apr 2009 13:55:27 +0000 http://crosslandteam.com/?p=904#comment-76871 Discount brokers take listings just so they can get buyer calls. They make so little off of the listing, that it's almost better for them if it sits there for a long time and generates more buyer leads. Discount brokers take listings just so they can get buyer calls. They make so little off of the listing, that it’s almost better for them if it sits there for a long time and generates more buyer leads.

]]> By: New Austinite http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-76785 New Austinite Tue, 21 Apr 2009 03:28:26 +0000 http://crosslandteam.com/?p=904#comment-76785 Why are sellers listing high? Why are sellers listing high?

]]> By: Sam Chapman http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-76708 Sam Chapman Mon, 20 Apr 2009 20:12:16 +0000 http://crosslandteam.com/?p=904#comment-76708 I completely agree. I turned down an opportunity last week to list a home in Arbolago that would have been around $1.2 million. There are 10 homes in that small community on the market and they are probably all overpriced. I told the owner that I would take a listing if he would price under $1 million and he said that he woudn't. I completely agree. I turned down an opportunity last week to list a home in Arbolago that would have been around $1.2 million. There are 10 homes in that small community on the market and they are probably all overpriced. I told the owner that I would take a listing if he would price under $1 million and he said that he woudn’t.

]]> By: shireen http://crosslandteam.com/blog/2009/04/20/should-realtors-take-over-priced-listings/#comment-76704 shireen Mon, 20 Apr 2009 18:53:08 +0000 http://crosslandteam.com/?p=904#comment-76704 Bravo! Bravo!

]]>