IN TODAY'S REAL ESTATE MARKET, Greedy Sellers Turned Down by Prospective Listing Agents!
AN ESTIMATED 10% OF AGENT INCOME GOES TO MARKETING COSTS - NOT WORTH IT FOR AGENTS TO INVEST IF HOME NOT LIKELY TO SELL!
Over the past year, according to a recently-completed survey by online home valuation website Zillow.com, 74% of U.S.Homes have lost value. However, many homeowners wanting or needing to sell their home seem to be in a state of DENIAL. Of those surveyed, 49% held the belief that THEIR home actually increased in value, or, at worst, stayed at the same value, over the past year.
See our Lil' Buddy's Blog Post from October 30th for more info on the Zillow.com survey.
Therefore, it's easy to understand the incredulous look on many sellers' faces when our Team, or other Realtors or Real Estate Teams throughout Chicago and the Suburbs, turn down listings at what objectively is likely a too-high price.
Many potential home sellers may wonder why successful Real Estate Practitioners might turn down business. "If the home sells," many feel, "the agent and his or her company stand to make a lot of money in Real Estate Fees."
But as homes languish on the market longer, and the cost of marketing them to the public, both in terms of time and money, increases, many individual agents, and the brokerage companies they work for, feel it's a bad business decision to throw good money, and time, after bad. Online marketing expenses, mailings, flyers, and print advertising grow more costly the longer a property sits on the market, unsold.
Agents and their brokerage firms regularly reject overpriced listings, unless the seller agrees to a schedule of timed price reductions until the house sells.
Since the beginning of 2008, Dean's Team Chicago has rejected a total of 10 home or investment property listings where the seller was adamant on listing at too high a price for the market. To date, seven of these were listed, at the too-high price, by other agents and brokerage companies. Only two have sold - in both cases, at prices even lower than we originally proposed when we were interviewed originally.
Indeed, the too-high prices may have scared away serious buyers, and the resulting lowball prices they sold for resulted from seller desperation after a long time on the market.
For a growing number of sellers, greed is not the only motivation. Some highly-leveraged homeowners, many who bought at the height of the housing boom a couple of years ago, and with high-leverage loans, need to achieve a certain minimum net proceeds in order to pay off the existing mortgage loan or loans. Buyers, however, care little about the sellers' bad judgment in his original financing, and buy at only the current market price - not a penny more!
Many agents, including those on Dean's Team Chicago, would love to sell any property at a higher price. It means more net money in the seller's pocket, a bit more for our Team, more potential business referrals for us, and gives the seller the ability to buy a more expensive, perhaps larger new home. It would also demonstrate a return to rising home prices, not likely upon us yet.
But our Team, and many other Real Estate Practitioners across Chicago and the Suburbs, can no longer be saddled with the marketing costs for overpriced listings that will not sell, and the resulting hostility and frustration of home sellers who may begin to feel we're not doing enough to support their unrealistic expectations.
Read Mary Umberger's column in today's Chicago Tribune for more info, as well as a Chicago North Suburban agent's take on signing listings he feels to be too highly priced for today's real estate market.
DEAN MOSS & DEAN'S TEAM CHICAGO
