Lisa and Jim's Northern Nevada Real Estate Blog: My Agent Won't List My House At My Price ... Why?

My Agent Won't List My House At My Price ... Why?

Sounds like you have an astute business person for an agent... congratulations.  We have often discussed the agents that will list at any price because they are either:  a. ignorant and thrilled to finally have a listing to work on, or b. they are going to take the listing and beat you up week after week for a price reduction.  The smart agent knows that an overpriced listing won't sell, and ultimately it will have a detrimental impact on the Market and the property itself. 

The matter is actually more involved for the savvy agent, the good business person that understands not just the mechanics of the industry, but the fact that it is, indeed, a business.  Despite the perception of the uninformed public that all a listing agent does is put a sign in the ground and put the property in MLS, there is a lot more to it.  When a homeowner signs a listing they agree to pay the agent a selling fee when the agent has performed ... not just procuring a Buyer, but actually closing the escrow with the Buyer.  

When an agent lists a property they are committing to a substantial financial investment.  In our particular market area, Northern Nevada, Just taking a listing actually costs the agent around $2,000 of hard money... without the extra stuff.  Then there are ongoing monthly carrying costs in the neighborhood of $400 per listing.  That figure will vary according to how many listings the agent carries and what his monthly operating costs are, i.e.- if an agent has ten listings and a monthly base cost of operation of $5,000 his monthly cost per listing is $500.  If it takes six months to sell your home, a neutral market (not Buyer or Seller), the carrying cost is $3,000.  The agent's cost is now $5,000 without a guarantee of any return.  If you have a $300,000 home and their side of the fee is 3% they will gross $6,000.  Now you know that the net is only $1,000 for their personal expenses, i.e.- taxes, house payment, food, utilities, recreation... life. 

Some agents might take a listing for the sign placement if you have a highly visible property.  That is an old school thought for there are fewer sign calls these days with the proliferation of the Internet in our industry.  If your agent is taking the listing too high you might be an unwitting victim ... and so is the agent.  They are only fooling themselves as to their actual benefits of the listing, and they aren't serving you well. 

Our Advice:  Even in a traditional office where agents don't pay as many direct costs, they still pay as their broker receives a larger portion of the selling fee.  Many agents, regardless of their fee-split arrangement, don't know they are in business.  Be careful with such an agent when considering them to list your home.  If they can't manage their own finances properly how careful will they be with yours... your money... when it comes time to negotiate on your behalf and to protect you through the escrow process that is fraught with financial traps?!  There is no "let's just try it", or "they can always make an offer" since marketing times have gone from a week to nine months on average.  The costs and risk are just too high to put your hook in the water on a whim. 

An agent must protect your property and investment as well as their time and financial expenditures when they take a listing.  The art is to price it right - to get you the most possible in a reasonable period of time.  Experience is Priceless!  Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781-5472, carsonvalleyland@hotmail.com, www.carsonvalleyland.com

Comment balloon 8 commentsLisa Wetzel • August 26 2008 01:07PM

Comments

In fact, the Code of Ethics states:

Standard of Practice 1-3

    REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.
Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) almost 10 years ago

This is very true, I have lost listings because of presenting a true and accurate market price. The listings went to other agents who, after all was said and done, could not sell their property at all, or who reduced the price several times and many thousands less than original price. Great blog.

Posted by Katrina Hernandez (Century 21 Shaw Realty) almost 10 years ago

Its hard to compete with an agent who sells the seller on the idea that they can get more money for the listing because they are such a good agent. I have had many taken from me this year because of this reason. I am watching and waiting for it to expire so I can jump on that. Too bad 6 months or more is wasted between agents.

Posted by Shane OnullGorman, Eau Claire Wisconsin, Real Estate Agent & Realtor- Buy or Sell (Eau Claire Realty, Inc.) almost 10 years ago

I just looked at a listing in our MLS that I priced at $265,000, they listed with an agent from an adjacent community who rarely works our market at $292,500.  It's THE highest priced listing per square foot in the entire neighborhood.  The Seller's are leaving for a new job and needed to sell the house is 60 to 90 days!  HA HA! not going to happen.  I even suggested they let me take them out and show them some of the homes that they would be competing against in the market. 

How can we compete against this type of action? 

Posted by Lisa Wetzel, CDPE, SFR carsonvalleyland.com (RE/MAX Realty Affiliates) almost 10 years ago

I'm sorry I missed this on the first go around. Very nicely done. Enjoyed your post. Regards, C. :-)

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) over 9 years ago

Yes some owners are a little out of line on the value of thier house. Have to convince them that the appraiser looks at the same comps your showing them when on your listing appointment. If it wont appraise it wont sell, unless the buyers want to pay more than the appraised price.. HAHAHA  Fat chance of that situation.  The house sells it self. It does no one any good to have a over priced listing. does it? Oh unless its in a very hot good area with plenty of activity and you will get alot of response. But in general a over priced listing is a waste of good advertising money..

Posted by Tim Riddle, SFR,TAHS, Azle ,Fort Worth Real Estate (Tim Riddle Broker Associate,Marsha Hardin Real Estate) over 9 years ago

We just got a price reduction on the house that originally prompted this blog in the first place.  It's finally inline with the market and has a reasonable chance of selling.  Unfortunately, it's now worth about $10,000 less than we thought we could have sold it for in August when we first took the listing. 

So ... the buyer has cost himself a tidy sum be not doing what we advised in the first place.  Jimmy always says, "We can't always get our clients to act in their own best interest."

Posted by Lisa Wetzel, CDPE, SFR carsonvalleyland.com (RE/MAX Realty Affiliates) over 9 years ago

Lisa :

When homes owners stay behind the curve on price it is painful. Today it is also banks on foreclosures that are behind the curve, they move too slow in a declining market.

Motivation is important when posting a listing price. If they are motivated to sell it may force the listing to reality.

Richard

Posted by Richard Stabile, Bergen County New Homes Builder Realtor (Re/Max Real Estate Limited) over 9 years ago

Participate