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Realtor Q&A: What to do about sellers with unrealistic expectations?





If a seller insists on a specific listing price, whether too high or low, what steps can (or should?) Realtors take to convince a seller to bring it in line with the market? Also, have agents ever turned down a listing because they thought it was a waste of time?


A number of local region’s top Realtors provided their views:


Casey Margenau, Fine Homes and Estates: “You have to quickly make up your mind if you want to work for a client who insists on pricing their home too high. Pricing too high causes multiple problems, and that plays out over and over and over again.”


Carol Temple, Coldwell Banker: “The first thing is to make  certain you want to get on that train. I have turned down listing on multiple occasions because you can tell right from the start it will not end well. Some listing presentations can be very brief, then you wish them good luck getting the price they want. With no exception, a home will sell for less than the market value if it is priced wrong to begin with. You try to stress that to the seller and keep nudging them to adjust to the right price, and remind them that time is not their friend.”


Casey Samson, Samson Properties: “I make every effort to educate the seller on pricing and the fact they will get the best price in the first 30 days. If they are unrealistic, I do not take the listing. I have seen that movie and know how it ends. They will lose and lose big. We all have a limited supply of time, energy and money and we need to spend it on our sellers who are realistic. I look at ‘not taking the problem listing’ as protecting my good sellers. Unfortunately, every once in a while, I list a home I love but struggle to get the seller where we need to be. They rarely do. I always regret it and promise I won’t do it again.”


Debbie McGuire, Keller Williams: “We try to understand the seller’s expectations, but if it is unrealistic, we may have to say no to a listing. It is the partnership between the seller and the agent that gets results. We usually recommend a price range. We may take the listing if the seller wants to try the higher end of the range, especially if we see strong sales trends, but with the understanding that the price will be adjusted if needed to sell into the current market. If there is not this understanding, then both parties will be disappointed.”

“It all depends on my relationship with the seller. If it’s long-standing, I might bite the bullet and take on a listing that is overpriced.”



Timur Loynab, McWilliams Ballard

 

Steve Wydler, Wydler Brothers Real Estate: “Sometimes it’s hard for homeowners to disassociate themselves and be objective. It’s a lot about dialogue. We try to be highly analytical and rely on as much data as we can get our hands on, then compare and narrow the price range. Yes, we will absolutely turn down a listing if someone’s expectations are so unrealistic. We don’t want them to be set up for disappointment. Some sellers fall in love with the agent who gives them the highest price.”


Karen Briscoe, Huckaby Briscoe Group, Keller Williams Realty: “We always look at the comps and market study and point out what is comparable. We can try a higher price the seller wants, but the market will tell us pretty quickly if that price was too high. Then we have to respond. It’s pretty rare that we turn down a listing if the seller is open to listening about the market.”


Dean Yeonas, Yeonas and Shafran Real Estate: “We present the data to a seller and tell them why we think the property is worth X. If a seller is someone we have known and is reasonable, we can try it at a price the seller wants, but with the understanding that after a two-week period, we might need to make the proper market adjustments. You do your best to educate sellers, but if the relationship is not a fit, we will not take a listing.”


Ann Wilson, Keller Williams: “I recommend to get an independent appraisal done, and it’s a 50-50 chance that they get that done. I also like to take sellers around to look at like homes so they can see the competition. That can put them back into reality. If the expectations are unrealistic, I will turn down a listing.”

Rob Ferguson, Re/Max Allegiance: “We like to show a seller what might happen if the original listing is too high. If the price is at a fair-market value from the beginning, they will get more for their home than pricing it too high at the start. You don’t want to end up chasing the market down. Buyers are smart and do their research. If a seller continues to be unrealistic, then there is not a lot we can do.”


Gloria Adams, TTR Sotheby’s International Realty: “You show them comps. That seems to be helpful and they have different viewpoints after that. I will always take a listing, with the caveat that will we need to have a price reduction after so many days, weeks or months. You have to keep your sellers aware of the market adjustments.”


Jack Shafran, Yeonas and Shafran Real Estate: “We deliver them the market information and comps. If they don’t agree, we respect that and will give them the benefit of the doubt, with the agreement that if there is no action, and there usually isn’t, there will be a conversation about reducing the price. If the chemistry does not exist from the start, sometimes you recommend another agent.”


Dawn Wilson, TTR Sotheby’s International Realty: “The only thing I can do is give my best professional advice. I discuss the marketing strategy. Ultimately, it is the seller’s decision. If it is overpriced, the seller will likely be chasing the market and the final sales price will probably be lower than if the home had been priced correctly at the beginning, or the seller may not receive any offers.  If the seller insists on a list price that is unrealistic for the market, I discuss that it is important to respond quickly to the feedback we receive from the market and make the necessary corrections as soon as possible.”


Mark Middendorf, Long and Foster: “You explain to your clients there are two values – a personal value and a market value. You can always negotiate with a seller and try their price for two weeks. Then if there is no action, we try my price. Buyers in this market are  too savvy. They know if a property is priced too high.”


Lori Shafran, Yeonas and Shafran Real Estate: “It is a tightrope and a dance, sometimes with sellers. It is a team approach and you [the agent] are invited to be the coach because of your skill level. You have to devise strategies where both can win. The agent is the expert and valued professional. You can try a few plays the seller’s way, then make adjustments if that becomes necessary.”


Karen Close, Century 21: “I try not to turn down business but instead work toward an asking price that is supported by recent sales of like/kind homes, market atmosphere/condition and seller motivation.”


Betsy Twigg, Washington Fine Properties: “I have a bit of a different perspective. A lot of the time it’s about a seller’s motivation. Do they really want to sell? They might want to price it too high on purpose because they really want to keep the home?”


Mike Highman, Acquest Realty: “First, we must remember as Realtors we have a fiduciary duty to our clients to meet their concerns and needs. I try to understand why the seller has that stratosphere number, then after a thorough and in-depth comprehensive market analysis that shows the property’s market value, we review a pricing strategy. One such plan is a step-down offering price schedule. After a mutually agreed upon time frame, we analyze the traffic interest and then move on to the next appropriate price offer if need be. Turning down a listing means you are not comfortable with going outside the envelope.”


David Howell, McEnearney Associates: “Sometimes, we and the seller agree to a pre-agreed price reduction written into the listing agreement if the property hasn’t gone under contract by a defined time on the market. Or, we agree that the seller can try their price, and if it doesn’t work, we’ll sit down for a serious conversation about changing the price. Yes, we have walked away from possible listings because we think it would be a waste of our time and – more importantly – the client’s time. If there isn’t a mutual, trusting relationship up front, then there are likely to be problems ahead.”


Anslie Stokes Milligan, McEnearney Associates: “If the seller insists on a list price that the agent feels is unrealistic, the agent has a few options: negotiate in pre-determined price reductions; insist on a retainer fee to cover marketing costs if the listing ultimately fails to sell; or decline the listing. I love the quote, ‘No one has the ability to waste my time except for me.’ Turning down a listing should be an agent’s last resort, but it is a powerful thing to be in charge of our time.”


Glenn Lewis, McEnearney Associates: “When a seller lists an unrealistic price, I’d simply hit them head on by saying the comparable data didn’t support their desired price and wish them luck with the sale. All the marketing in the world won’t sell an overpriced listing. I have definitely turned down overpriced listings. They can be costly and a waste of time for all.”


Timur Loynab, McWilliams Ballard: “It all depends on my relationship with the seller. If it’s long-standing, I might bite the bullet and take on a listing that is overpriced. I would make it clear to my seller that the list price has no basis in reality by providing a comparative market analysis that puts the list price into perspective. I have turned down listings not because I feel they were a waste of time, but because sellers refused to take my advice on pricing and marketing strategies.”


Craig Mastrangelo, Re/Max Allegiance: “I may not take the listing and tell them: ‘I would prefer to disappoint you now [during a listing presentation] than let you down three to six months down the road if/when price becomes the main buyer objection. If the price they desire is closer to market absorption, I may agree to their higher price, but request that timelines be built into our listing agreement to ensure price reductions, at specific periods.”


Dee Murphy, Long & Foster: “Luckily, the majority of sellers in this market are sophisticated enough to be reasonable. To prepare for an aggressive seller, it is critical to provide relevant data on recent sales, with pictures and stats. If the seller insists, I would negotiate a time period to test their price (two weeks), and if the feedback is that it is priced too high and we have no offers, we agree to adjust the price immediately. I have respectfully passed on a listing when the seller is insistent on an absolutely unreasonable asking price. It does not reflect well on an agent to have their for sale signs sitting in people’s yards for months on end.”


William F.X. Moody, Washington Fine Properties: “We prepare a pricing chart showing the high, low, median and average for the seller. Often sellers want to choose a higher price, but having this written documentation is important as when an offer comes in, it is effective to show the seller what the pricing experts recommended from the beginning of the sales process. I have occasionally turned listings down when the seller didn’t take the time to focus on the educational process of the pricing and market conditions.”  


Natalie Roy, Keller Williams: “When a seller is focused on an extremely high listing price, I suggest an appraisal. The benefit is the seller gets an impartial professional opinion on the value of their property.  If the seller decides not to get an appraisal, or gets one and is still wedded to an unrealistic sales price, I decline the listing. To a seller who has unrealistic ideas of a listing price for their home, if you’re the highest bidder on the home you get to keep it.”


Tania Hosmer, Keller Williams: “If a seller wants to list their home for a sales price that is too high, I provide them with the most relevant sales information comparable to their home and discuss how it affects price in their neighborhood. I also explain current trends occurring in the local real estate market and then outline the best pricing strategy. Sometimes, it turns out to be an ‘I told you so’ situation based on the realities of the market and reactions of potential buyers and other agents. Personally, I hope never to turn down a listing. No listing is a waste of time. Some take more time and patience.”


Billy Buck, Buck & Associates: “It’s a seller’s choice to list a price how they want. We will not fight with them. We try to give them guidance and decide on a price that is appropriate and close to the market. There are some cases when sellers are not in a rush to sell their property. I don’t like the strategies of ‘testing the market’ with a home, so I have respectfully declined some listings.”


Eli Tucker, Eli Residential Group: “Sales strategy is about probabilities. The probability of selling well above market value is very low and the probability of having to sell below market value after you’ve been on the market for too long is high. I provide my clients with a risk assessment, make a recommendation, and allow them to choose the strategy that works best for them.”


Joan Stansfield, Keller Williams: “I provide and explain the data that does not lie. Or, I’ve agreed to list at their desired price so long as they understand the importance of adjusting the price and agree to periodically adjust. Yes, I have turned down a listing when I sensed the sellers were not going to listen to me and trust my judgment. One of my favorite lines I often share is: ‘In life, you want to be the first born, the second wife and the third Realtor.’ I’m often the second or third Realtor who finally is able to get the home sold.”


Dianne Van Volkenburg, Long & Foster: “I find it uncommon to encounter a seller who is unrealistic regarding pricing. However, every so often there is one who thinks the market in Great Falls has recovered. When this happens, I educate them on the current conditions and I let them make the final decision. I have never turned down a listing. I have, though, told a very few owners that I could not list their home at their desired price. In those situations they have listed with other Realtors, and eventually came back to work with me at a valid asking price.”


Donna Moseley, TTR Sotheby’s International Realty: “We try to get an up front agreement to reduce pricing within a predetermined time frame to a predetermined price.  It is rare, but we do turn down some listings, not many. We do everything we can to get the property the best and highest price, staging, Internet presence, showings.”