I wrote this post 2 months ago but decided not to post it. Was I frustrated at not getting the listing? probably. Could I have been wrong about the price? Yes. Could I have been wrong about my marketing abilities? No. Given that the home in question is still on the market and has gone through numerous “price reductions,” I think it is worth having home seller’s read on. So here it is…
Home Sellers Beware of Agents Who Promise a Unrealistically High List Price.
I received a call week ago Friday from a potential Los Altos home seller. As luck would have it, I was packing for a well deserved family vacation to Sun River, Oregon. I talked briefly with the seller and I set up an appointment for the following morning to meet with the sellers before I left on my trip.
We met and discussed their situation and I promised to send them a Comparative Market Analysis (CMA) on their home as well as a detailed marketing plan showing how I would market their home in order to maximize their home’s exposure to the market as soon as I got to Sun River. They told me to take my time since one of them would be on a business trip until the following Thursday. Even though I was “on vacation,” I told them they would receive the information no latter than Monday, which they did.
They had been in their home for about 4.5 years. The property was somewhat unique since the home was undersized yet the lot was oversize relative to the typical Los Altos property. Making some adjustments reflecting the uniqueness of the property, I gave the sellers a realistic number that I thought it should sell for, a recommended list price and a time frame in which I thought it should sell in. While the sellers digested the information, I tried to enjoy my vacation.
Flash forward a few days, I get home from vacation and contact the sellers to see where they were in their decision process and to answer any questions that they may have. Low and behold, from the time we met to our last phone conversation, they had interviewed a few other Los Altos real estate agents (that was expected) and listed the home with one (not expected). I thought, why did they list with that agent?
In my discussion with the seller, it became clear to me that they thought that I was highly responsive, because they had commented on how I returned their phone call, set up an appointment to see their home and then met them the next day at the their home before any other agent even returned their initial phone call. Given my track record of 15+ years of representing sellers and buyers in and around Los Altos and that I had been referred to them from one of their friends, I felt they thought that I was qualified.
The only problem that I could see that they might have was that I was going on vacation for 1 week. I reassured them that I could do everything that I needed to prepare their home for the market remotely. Apparently, no real estate professional has ever prepared a home for the market without being physically present at the home (sarcasm added).
Compared with the agent the sellers chose to represent them, I have a much stronger web presence. I am much more straight forward and I tell it like it is (sometimes to a fault). The other agent spends more money on local print ads that in my mind do nothing for the seller but make the agent look good. There are some minor differences between the brokerage houses that we work for, but that only strengthens my position.
The major difference between the two of us was the recommended list price. There was a difference of over 13% between my recommended list price and what the seller is going to list the home for. Hmm, could this agent have “bought the listing” by promising a higher sales price and then when the home doesn’t sell, convince the seller that the market has turned and tell the seller she needs to reduce the list price. That would never happen in Los Altos (again, more sarcasm).
Could I be wrong about the list price? Yes. Could I be wrong about this agent motives? Yes, that is why I haven’t used real names and addresses (that and the fact that I don’t want to get sued). But the fact remains, the comps/numbers are the same, they don’t change. The numbers that an appraiser will use don’t lie. If this was a modestly remodeled four bedroom home on the same sized lot, then yes, the seller should get that number. But given it’s current floor-plan and size, the number just isn’t there.
I guess it comes down to one agent’s interpretation of the market and it’s numbers versus another’s. Over the last 15 years, I have become pretty good at analyzing the numbers for my clients, but I guess we will have to see. Meanwhile, there is a seller out there with real money on the line. How will she do? Only time will tell.
Flash Forward to Today
Since writing this post, the property has gone through several price reductions totalling a 17% reduction in list price. The property has become stale for the market and will likely require further price reductions in order to overcome the fact that the property has become stigmatized and is perceived as a bad value.
If you are a seller and an agent recommends a list price that doesn’t fit with recent statistics, ask the agent why? Have them support the price with real numbers. Seller’s need to do homework, be knowledgeable, ask questions, be realistic and don’t let anyone paint a picture that doesn’t mesh with reality.