Here’s a really simple idea for REALTORS who are struggling to sell “mis-priced listings.”
Just Say No!
Call it the Nancy Reagan Rule of Real Estate: Some listings are “bad” for you – kind of like certain kinds of substances are bad for you. But sometimes, REALTORS just get on a “listing high” when they get a homeowner all geared up to sign on the dotted line. After pouring out their hearts in a listing presentation, filled with facts and figures and advice, they become vulnerable to a moment of insanity called “I’m gonna get this listing!” And that’s when they all-too-often shoot themselves in the foot.
Every REALTOR “knows” better than to take a mis-priced listing. But they need to start “doing” better if they want to survive and thrive. Here’s a simple economic fact: the buyer of any product sets the price. Period. No ifs, ands or butts, unless you’re a one-of-a-kind painting or bejewelled egg. As long as there are “other options” in the marketplace similar to your product – other computers, MP3 players, airline seats and houses – to choose from, the buyer sets the price.
REALTORS need to start every listing presentation with this fact. Here’s a simple way to do it:
Help the seller see that they don’t really exist. Not as “sellers” anyway. Sure, they are “momentarily” selling their home, but as soon as they sign the listing agreement, the really become buyers. If we sell their home, they are going to have to move out and get a new home. So all sellers are really buyers!
As potential-buyers, pre-signed-listing-agreement-sellers already understand that “they’re going to get a good deal” on their next home. They full expect to “control” the process by “making an offer” and “lowballing” the sellers. Of course, they also – insanely – think that these “buyer emotions” don’t apply to their home. Nosiree! Buyers are going to line up – from your newspaper ad, mind you! – and pay full price for this-here-beauty of a home!
When you help sellers see that they are really buyers, then they will be able to “make the leap” to understand that what they are thinking is exactly what other buyers are thinking about their home right now! If the buyer feels that it’s overpriced, then it is. Peroid. They’ll shop around. You can’t make them overpay. Just try calling your broker and putting your Bear Stearns stock on the market with an asking price of $80. Sure, you paid $80 for it; but nobody is willing to buy it from you at much more than $8.
So the buyer always controls the market.
Never mind your dog-and-pony show about how you’re cool, you have a great company, your website rocks and you even have a Blackberry. None of that should even be discussed until after you have determined the sanity of your seller. While it’s no secret that there are “emotions” in the sales process, you can rest assured that there are some glimmers of pure reason, too: especially with tight credit and more cautious buyers. Compared to the “bid up at all cost!” days, buyers are downright Mr. Spock these days when it comes to making an offer.
More importantly, it’s part of the “REALTOR, heal thyself” mentality that we need to spread throughout the industry. Nobody “forces us” to take bad deals. We do it to ourselves; which means we can stop, too. Who cares if you don’t list the property? Really – do you “need” to throw away your marketing dollars so easily? Are you so bored that you “want” to sit at open houses where buyer after buyer tells you it’s overpriced?
Figure it this way: you can always co-broke the deal on a buyer’s behalf – and let someone else “list” the property and assume all of the up-front costs. Why take on the expenses of a money pit? Just focus on finding a buyer. You can keep up with the FSBO market just as easily as the REALTOR-market using the web (like owners.com). At some point, a highly distressed listing agent – who’s going broke carrying the overpriced inventory will beg their client to take ANY deal you bring them.
In the meantime, you’ll get back to making profits. If you only just say NO.