Maureen Megowan's Blog

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I Hate To Say I Told You So : The One That Got Away !!

I hate to say I told you so, but I am.  Below is my original posting back in November about a listing I lost to another agent after making a listing presentation, and was originally entitled "The One that got Away":  Make sure to read the update at the bottom of this post.

"I met recently with a woman who was interested in engaging a real estate agent to sell her home.  I had met her previously at her home during her extensive period of preliminary meetings with potential agents. She was very proud of the work she had done to get her home ready to put on the market,  but had a very highly inflated view as to what her home was worth.  The woman was extremely detail oriented and had met with at least 30 real estate agents , and had attended many, many open houses in the area. 

She came into my meeting with her at my office with a thick notebook of materials she had collected.  I was delighted when she said that I was in the final 2 of the agents she was considering and wanted me to finalize my opinion of what she should list her home for.   Her home was basically a tract home very similar to other properties in the area which were either on the market or recently sold, so it was relatively easy to prepare a comparative market analysis for her.

Based on my comparative market analysis, I demonstrated to her that most homes similar to hers were selling in the high $800,000 to low $900,000 range, and suggested a list price of approx. $910,000.   You could see her extreme disappointment on her face while I was discussing this with her,  and she finally said that she thought her home was worth closer to $ 1 million.  I then asked her on what basis she believed that and whether she could point how any fault in my CMA.  She really didn't have an answer.

I explained to her that many agents will often tell a seller what they think the seller wants to hear, and will agree to list the home at an unrealistic price, with the intent of securing the listing and then significantly dropping the price in a few months. I explained to her that this was a common tactic used by agents in a listing presentation, but that it ultimately leads to a much longer sales period.

Most activity on a new listing takes place in the first 2 to 3 weeks on the market.  A home properly priced to the market will attract a lot of showings and interest from buyers.  A home obviously over priced however, will often discourage agents or buyers from looking at the property as they believe, rightly so, that the Seller is either uninformed about the market or will simply be too difficult to work with in trying to negotiate a deal.As an over priced property sits on the market,  the cumulative days on market continue to rise, and then agents begin to wonder what is wrong with the property.

I explained all of this to my potential client and tried to get her to understand that I try to be very truthful with my clients and don't try to sell them on something that can't be achieved.   I have taken clients in the past that insisted on over pricing their property, and invariably found that it just led to the troubles discussed above, and more time, effort, and expense on my part in marketing the property over an unnecessarily long period of time.

Sure enough,  in a couple of weeks, my potential client called me and told me that she had listed her property with another cagent at a price close to $ 1 million.  I thanked her for the opportunity, and although disappointed,  I must admit that I was somewhat relieved not to have to spend the next 6 months trying to sell this over priced property.

What did I learn from this eperience??  Sometimes I wonder if I should just do what other agents do and just tell potential clients what they want to hear,  but I think that in the long run,  clients appreciate my honesty and direct dealings with them, and after all, what is more important than our repurtation ?"

 

UPDATE:

After listing the property last October 31st for $989,000, and then lowering the price to $949,999 in late January, the owner and agent have just lowered the list price to $910,000, exactly the list price that I recommended to her  5 months ago. After wasting 5 months on the market trying to market an over priced home, maybe now they might see some activity. 

 

For more information about Palos Verdes and South Bay Real Estate and buying and selling a home on the Palos Verdes Peninsula, visit my website at http://www.maureenmegowan.com . I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula. I would love to hear your comments or suggestions.

Comment balloon 46 commentsMaureen Megowan • March 24 2012 05:59PM

Comments

Yes, I had a similar experience with a seller in Saratoga-he liked her price...but ended up reducing, reducing and finally selling for LESS than what would have worked if he's chosen me and marketed it at the right price in the beginning.

Posted by Michelle Carr-Crowe Just Call 408-252-8900 Top 1%!, Family Helping Families Buy & Sell Homes 40+ Years (Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty) over 6 years ago
I've had it happen more than once and I do tend to feel somewhat vindicated when the price gets lowered to where i suggested originally. Just imagine if these sellers listened in the first place, they likely would have already sold their homes and moved on....
Posted by Sue Ellett, Marble Falls, & Austin, TX, Lake Travis, Lake LBJ (Better Homes and Gardens Real Estate ~ Paragon Property Group) over 6 years ago

Maureen, I've experienced the same thing myself. It does give us some measure of satisfaction to know that our assessment was correct. I just wonder if the sellers remember their original counsel. I'll bet many do, but fewer will admit it ;) Sometimes we lose the listing, but this gives us a little tiny feel-good, doesn't it?  Featured in "The One That Got Away"

Posted by Karen Crowson, Your Agent for Change (Coldwell Banker Residential Brokerage) over 6 years ago

Often the sellers are embarrased, I think, because they change agents with every price drop. Naturally eventually one agent "wins" at a much lower price. Shame your potential seller didn't get back to you to list it when she realized she had to lower it to your price. That is the message agents will get who "buy" a listing.

Posted by Hella Mitschke Rothwell, Hawaii & California Real Estate Broker ((831) 626-4000) over 6 years ago

That's got to feel good... validation that you were right to begin with. Good thing you trusted your instincts and didn't take the listing at a higher price.

Gretchen

Posted by Mel Ahrens, MBA, Kelly Right Real Estate, Customized Choices for your Real Estate Needs (Kelly Right Real Estate) over 6 years ago

Maureen, or maybe they might call you and beg you to take them on!

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 6 years ago
$949,999? Nine factor much? Wonder if your words echo in the sellers mind?
Posted by Dale Samples, REALTOR -Homes for Sale Charleston, West Virgini (304.741.4705 • www.dalesamples.com ) over 6 years ago

Some agents will take any listing for market exposure & to attract buyer clients. I personally think it is a waste of time & money to take a listing that is overpriced.

Posted by Yvonne Schnee (Keller Williams Realty Moorestown) over 6 years ago

Maureen, to bad you didn't get the listing, once the owner realized the mistake they made. It's nice to get validation, but the listing would have been better

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 6 years ago

After months on the market, that seller has missed their window of opportunity.  They should have hired you first.  And you even let them know they shouldn't listen to the highest price from other realtors.

Posted by Kay Van Kampen, Realtor®, Springfield Mo Real Estate (RE/MAX Broker, RE/MAX Solutions) over 6 years ago

Maureen -- I was hoping to read the listing expired or she cancelled and came running back to you, the agent who advised her correctly in the first place. Well, there's still time for that!

Posted by Barbara Altieri, REALTOR-Fairfield County CT Homes/Condos For Sale (RealtyQuest/Kinard Realty Group, Fairfield and New Haven County CT Real Estate) over 6 years ago

At any given time in our careers we have all experienced the same scenario. Unfortunately our prospective clients don't understand that what they are doing will ultimately cost more money in the long run. When we finally hear and/or see that the price of a lost listing is where we advised the seller to place it , we receive a sense of validation , but sometimes the commission check would be nicer.

Posted by Laura Gray (RE/MAX Realty Group) over 6 years ago

Maureen, I have seen that happenming with me a lot - of course, price range is much lower. Nonetheless, someone at my office told me...hey, you lost the listing, anyways...(and the seller is willing to bring down the price, then why not? May be, they are right - the one that got away...)

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) over 6 years ago

Have been watching a local FSBO - who did not want to pay a listing commission, but is offering a buyer agent commission - try to sell for 8 months at the wrong price, only to finally put her house on the rental market, you can only shake your head sometimes...it's nice to get validation, though, isn't it?

Posted by Susan Haughton, Susan & Mindy Team...Honesty. Integrity. Results. (Long and Foster REALTORS (703) 470-4545) over 6 years ago

It's so frustrating to see this happend.  I don't know how we can get through to the buyer.  I have seen several instances where the seller didn't listen to the 1st agent.. went to the 2d agent who priced it where the first agent suggested.. and then it sells in a sort time.  OUCH

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 6 years ago

I'm currrently in the same boat and I've also wondered if I should just tell sellers what they want to hear.

Posted by Jill Sackler, LI South Shore Real Estate - Broker Associate (Charles Rutenberg Realty Inc. 516-575-7500) over 6 years ago

Stay on top of this listing. It could expire soon . . . and become yours. I think you have proven yourself to know the market better than the other agent, and I hope this seller knows that.

Posted by Donald Reich (Prudential Centennial) over 6 years ago

Way to stick to your guns.  What goes around...

Posted by Brandi Rademacher (RE/MAX Four Seasons) over 6 years ago

Meg

The problem is now that buyers have seen price drops over 5 months they may wait to see more before making a move. They should have hired you to begin with.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) over 6 years ago

Of course we as agents know that it's better to price the house right than to have it sit on the market for so long.  Unfortunately, our clients don't always listen and they feel that they know better because they watch the news.  Hello!?  We do this on a daily basis and stake our reputations on it.  Oh well, the best thing to do is move on and maybe the client will remember us and send us a referral.

 

Thanks for sharing Maureen.

Posted by Eric Salonga, Your Key to the Central Valley (The Salonga Brothers at Reed Realty) over 6 years ago

Maureen too bad they did not listen to you, sadly we all have these type of sellers..... sadly everyone looses if they crunch the numbers 5 months of holding costs and a stigma attached to the property!

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) over 6 years ago

Maureen - Not only have they wasted marketing time.  They've also wasted the honeymoon period.  I wonder if they'll now be able to sell it for what they could have 5 months ago.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) over 6 years ago

At the end of the day, we work for the sellers and if they want to get 1million, then take the listing and try to get that much. In the 5 months on the market, you could have done a bunch of open houses and filled up a database of buyers at that price range. Seriously, you knew she would lower the price, so why not be the one that gets paid when she sells it.

I'll take anyone's overpriced listing all day long. The sign calls and open house opportunities alone make it well worth it, even if the listing never sells. I still get calls from a listing I had that was cancelled but still show up on that piece of crap called Zillow. It shows it's active about 9 months after it was cancelled. It was way overpriced, we eventually cancelled it, but I still get calls.

Posted by Andrew Martin (REMAX Accord) over 6 years ago

Andrew,

The point I am making is that when making a listing presentation, I believe that it is important to tell my potential client the truth about the value of their home and to give my best professional advice to them.  I know that if I just agreed with the client that she could get close to a million dollars for her property that I could have had the listing, but that would not have been ethical on my part.  After hearing my advice and then she chose to give me the listing but insisted that I list it at the higher price, I would have done so. In this case, the client did not want to hear the truth, and just shopped for an agent that would tell her what she wanted to hear.

I agree that it is better to have an over-priced listing than no listing at all. I have taken listings that I knew were over priced because that is what the client wanted to do, but with the understanding that if the property does not sell within a reasonable period of time that they would be willing to lower the asking price in stages.  

I do not "buy" listings by exaggerating the market value of a home and misleading a potential client just to get the listing.  If a client chooses to list a property higher than I think that it will sell for,  I will still market it as best as I can,  but my conscience is clear that I have given them the best advice that I can give.

Posted by Maureen Megowan, Palos Verdes Real Estate Blog (Remax Estate Properties - ) over 6 years ago

Hi Maureen,

Thanks for processing your frustration in public. It made an interesting read.

There are those that take overpriced listings, and many of those end up dropping the price and eventually selling.

I do not have the patience for that.

Phil

Posted by Phil Leng, Phil Leng - Retired (Retired) over 6 years ago

The seller reminds of those TV ads where they are told they can take their own appendix out because they know more than the professional.  I still say if we had power of attorney for everyone-this business would be a lot easier. :-)

Posted by Barbara Tattersall, GRI (Keller Williams Realty Metropolitan (Keene,NH)) over 6 years ago
You need to consider the opportunity cost of this. The six months you saved in stress and not being stuck in cement may have allowed you the extra time and energy to sell several homes in the same time period. This becomes the win.
Posted by Cheryl Ritchie, Southern Maryland 301-980-7566 (RE/MAX Leading Edge www.GoldenResults.com) over 6 years ago

Cheryl #28 is right. The seller has a huge opportunity cost as well. The correct selling price in the fall may or may not be the correct selling price now. She has been chasing the market for 6 months and carrying the house  - mortgage, taxes, utilities for all that time. If she sells for even close to your suggested price, how many thousands more has it cost her. It's a really expensive misjudment. And realtors who "buy" listings with this nonsense through inexperience or whatever are not helping their clients.

Posted by Anne M. Costello (Weidel Realtors) over 6 years ago

Ah, Maureen, an overpriced house is a lonely house.  I let two listings go last year that I just couldn't convince the sellers to lower.  So, rather than waste anymore of my time, I dropped them.  They never sold with their new agents either.  

Posted by Mike Cooper, Your Winchester, VA Real Estate Sales Pro (Cornerstone Business Group Inc) over 6 years ago

So, sad but true, the name of the game is to deceive, as Andrew points out. I have had the pleasure of selling real estate for 27+ years and in that time I have worked hard to only have listing inventory that was seller-able. If I came upon a seller that motivation was not a 10-- I would try to educate but in the end I did not want the cost emotionally or financially that having a listing that doesn't sell.  Since every agent is CEO of their business taking listings that do not sell does not seem to make good business sense.

It would be nice if the local MLS, as well as the local boards that agents are affiliated with have a governing factor that if a listing is 10% over market value, it does not get into the MLS, or the agent receives a fine (substantial). Maybe, we then would learn to be ethical, and not be driven by greed, ego etc.

Posted by Lorraine or Loretta Kratz, Certified Negotiation Consultants (Crescent Moon Realty, Inc. & Land N Sea Auctions.) over 6 years ago

Most times its better to walk away from that listing and keep up good communication with the seller so they may come back to you after it does NOT sell and they are ready to lower price.

Have A Great Day!

Posted by Doris Freeman, Broker/Agent, Realtor, Madison-Gibson-Crockett (RE/MAX REALTY SOURCE) over 6 years ago

The bad thing is, the dishonest, or uneducated, or "simply willing" agent is the one that will sell the property and get the commission.  Where is the fairness in that?? :-(

Posted by Teresa Tedder (Carolina Realty of Wilkes Inc) over 6 years ago

Maureen, in my opinion an agent is violating their fiduciary responsibility to their client when taking an over priced listing. Telling a client what they want to hear is wrong. You were right in walking away.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA over 6 years ago

Why is it people still do it knowing that everyone doesn't like it? Overpricing is a slap in the face to all

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) over 6 years ago

Hi Maureen - It's always disappointing when people do that. I guess they never heard of "buying the listing!"

Posted by Peggy Chirico, REALTOR® 860-748-8900, Hartford & Tolland County Real Estate (Prudential CT Realty) over 6 years ago

Hi Maureen, this has happened to me as well, and I have wondered whether to take the listing anyway. At the end of today, the new agent has your price and the listing and he/she will benefit now with a more realistic seller. That could have been you. That is what I wonder about....

Posted by Sandy Acevedo, RE/MAX Masters, Inland Empire Homes for Sale (951-290-8588) over 6 years ago

Maureen, it's a shame it works out like this. Worse, the agent who agreed to list it at the inflated price may now get to sell it at the price you recommended in the first place.

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) over 6 years ago

So annoying!!  I think that one approach might be to take the listing at the higher price, so long as it is clearly understood that you believe it is over-priced, and the seller is on board with a specific timeline for price reductions.

Posted by Marti Steele Kilby, CRS, Broker/Owner, San Diego, CA (Steele Group Realty) over 6 years ago

Hi Maureen,  I remember the original post and wondered how this would turn out.  Including a price reduction schedule in the listing agreement might make sense.

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) over 6 years ago

I like it when FSBO's are overpriced, because it means more opportunity for me as I pre-qualify their prospects.  And most the time they get introduced to a friend of mine, a local Real Estate Agent that knows their area well.

I don't like it when the same thing happens with an Agent listing, unless the Agent's CMA supported the appraised value.  Otherwise, it's always a painful situation.

Posted by Raymond Denton, Simple Man (Academy Mortgage Corporation) over 6 years ago

I explained to her that this was a common tactic used by agents in a listing presentation, but that it ultimately leads to a much longer sales period.

You know what the seller heard when you said that? Blah, blah, blah, blah, blah. They don't hear your words.

I'm with #23. Take the listing and eventually they'll figure out you are right, plus you'll get paid. The way you went about it, you are right but you're not getting paid.

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) over 6 years ago

Wow, some Sellers feel like they are the expert in the market and want to get an Agent that will just fall in line with their personal beliefs. I wonder how the Seller feels now that 5 months have been wasted on the market and now the list price is where you originally suggested? I'm sure she wishes she would've listed with you.

Posted by Dominique Britton, Experience the Difference in Real Estate Services (GoHomeToAtlanta.com Realty LLC - 678.250.5022) over 6 years ago

Maureen, there you go. You know your market. Like Elizabeth comment #42 you could have taken the listing and wait for seller to come to her senses and then get it sold. But then you have to take care it for all those months. If you didn't want to, then you made the right choice saying it like it is. P.S. Five months is a long time taking calls, showings, marketing, client updates, etc. Not sure I would have the patience for that. My time is valuable. Move on, because there'll be something better. just my two cents

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) over 6 years ago

We are constantly biting our tongues.  I'm sure you've got a few more holes now as a result.  This happens all the time with buyers I've worked with, you just didn't want to stop thinking they knew more then me about making a good offer . . . the home they wanted to buy got away too!

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) over 6 years ago

Hi Maureen, Yes we've all been there and done that.

5 months ago the house would have sold for the 910k you suggested. Will it sell for that now? It's doubtful. It's an "old" listing now and buyers view them differently than those fresh on the market. Sellers just don't realize what a disservice they're doing themselves by over-pricing their homes. 

Posted by Denise Hamlin, Broker/Owner, Helping Happy Clients Make Smart Choices (Cardinal Realty ~ 319-400-0268) over 6 years ago

It is very difficult some times, but stick to your guns.  It is better to tell folks what you truly believe the house is worth... most of the time you will waste your time with an over priced listing.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 6 years ago

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