In most markets around the country there are an astounding amount of active listings. Locally, where I am in New Jersey, I’ve heard surrounding towns that have up to a 42 month supply of inventory, if no other homes came on the market.
Also, in most markets around the country the expiration rate of listings taken is tremendously high. Again, locally, it was roughly 70%!! 70% of the listings taken in 2008 in my market did NOT sell!!
I’m not telling you this for the doom and gloom aspect. I’m telling you this to show you how you can do your part to help the real estate market, the economy, your sellers and yourself.
DON’T TAKE OVERPRICED LISTINGS!!!
As both a former agent and now a coach, I am here to tell you that the worst thing you can do to your business is to take overpriced listings.
Overpriced listings take your time and energy. They cost you money, and usually cost you a client.
So, you work your butt off, get stressed, don’t get paid and lose the client and any future referrals.
Is that a good business model?
There are many reasons why an agent would take an overpriced listing, so I’m going to list some here and you simply pick the one’s that ring true for you.
–Desperate for business, any business – Understandable in these times. Yet if you consistently go after the business with consistent lead generation as we’ve mentioned over and over in our blogs and coaching, you won’t be desperate. You’ll be able to turn away “business” that won’t actually be business. And that’s the point: especially in this market, an overpriced listing will NOT sell, so it won’t be business. It’ll be a headache.
–Don’t want the competition to get the listing – Who gives a flying fig newton? You certainly shouldn’t. Other than not wanting another agent to clog the inventory with more unsold listings, why would you care if they decided to take it overpriced? It’s not going to sell. If someone wants your trash, who cares?
–It’d be great to have a sign in this neighborhood – I can understand this one, too. Yet, there are the problems with that thought process: First, you’re now only serving your best interests, not your seller’s. Bad business. NAR itself shows that less than 1% of buyers buy the house they call in on. So, you’re only looking to get leads, not sell that house. Second, the normal conversion rate of sign/ad calls to appointments is very low in this industry. That rate will seem like Mt. Everest when you’re trying to convert buyers calling in on something obviously overpriced!
“It’s HOW much?” *CLICK*
–I’ll take it now, and reduce it later – So you’re a fighter, huh? You actually want to be in that position? No agent should WANT to be in a position to have to get price reductions. Besides, unless you’re good enough to get a huge reduction, you’re now chasing the market with your seller.
Let’s say you list it at $350K when it should have been listed at $320-$325K. If you go for the reduction after 30 days, are you really going to be able to get a $30K reduction? Most likely, you’ll get something like a $5K reduction. But let’s say you got $10K, and the house is now $340K, but it should be listed lower than $320K, because the market is still going down. In 30 more days (and probably with very few showings, if any), you’ll go back and maybe, if you’re lucky get them to $325K. That means, if you’re really good at reductions, you got your sellers to agree to a price you should have listed it at two months ago, and it’s a down market. The house is likely a $309,900 listing by now, but you’re at $325K. And don’t forget your market’s average list to sale price ratio. If you get any offers, they’ll likely be well under $300K. Do you see how this is an exercise in futility?
–It could sell, you never know – No, it won’t. Look around, Sparky. How many homes are on the market right now? What percentage of the listings taken expire? Have you heard anything telling you the market’s going up anytime soon? This is just desperation talking. Walk away. Put the sign and lock box back in your trunk, and WALK AWAY.
–I’m not confident enough in my skills to close them on the right price – Now this I can really understand. Confidence comes from practicing and learning scripts and objection handlers. It comes from not being attached to the outcome. If they simply won’t agree to a price that will cause it to sell, you have to be willing to walk away. You simply cannot help them at their price. And remember, no one can, so you’re not losing commission.
We can help you learn some pricing objection handlers. Be sure to take advantage of our February 1/2 Price Objection Hhandler Sale.
Get our book, Now What Do I Say?, with over 425 objection handlers for only $12.50 + shipping.
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And don’t take overpriced listings.