Will you sellers stop being so stupid?!

Village Idiot

I have just learned of a house near me that will be coming on the market today or tomorrow. I’d have estimated its listing price at $3.750, or, if the owner wanted to stretch, $4.250 million. I’m informed that the brokers invited to pitch the listing (I was not) priced it at $4.5 and around there. But one agent said $6.5 million and of course, got the listing.

So the idiot owner will be sleeping tonight with visions of sugar plums in his head, awaiting Santa Clause on the morrow. Anything is possible, and I could be completely wrong, but my guess is that a year from now that same owner, having found nothing but a lump of coal in his stocking, will be bitter and angry. I think it’s his fault for listening to such nonsense in the first place.

(Some) agents will lie to you to get your listing. If they give you a figure that’s $2 million above what other agents are telling you, ask them for a guarantee – will they buy the house from you at that price if they can’t sell it in, say, six months? When they won’t, dismiss them and use the services of the agent who’s telling you the truth. Don’t be a dummy.

6 Comments

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6 responses to “Will you sellers stop being so stupid?!

  1. Maximus

    CF, how does the process work in getting competing broker bids? The price shouldn’t be off by $2 million from the rest of the field. The seller should do his/her own due diligence on comps.

  2. xyzzy

    I realize this is hard to face, but look at it from the seller’s point of view. A bunch of people tell you 4.5 million, which is probably less than you were hoping for, and one person told you 6.5 million.

    If you go with the 4.5 million listing price and someone bids you full price the first day are you going to be happy? No! You are going to be pissed! You are going to think the other listing broker was right it was a $6.0 million house and now you are giving the house away.

    Its a real no win situation. Reminds me of 17 Hendrie drive. Going to be a similar situation.

  3. Luke Gardner

    When I was down in TriBeCa trying my hand at brokerage I pitched a beautiful condo apartment on Franklin. My problem was that the seller told me what he thought the “right” price was. His number was fully a half million below market, and then some. This was at the peak of the market.

    After my discussions, I prepped my comps and sent him those along with my cover letter, urging him not to disclose his own price estimate to any other brokers he might be consulting as it would pollute their estimates downward. He didn’t understand that a broker is always far happier to get an absolute sure sale, so if you think your property is less valuable than it is, the broker will likely oblige you in his pricing evaluation.

    I didn’t get the listing. Another broker, who priced it very close to the sellers own estimate did. Such is life. There was a bidding war that pushed it right back up into about the the lower 1/3rd of my estimated selling range. The apartment sold inside of three weeks. As it happened it worked out for the seller, but that was more a function of the then insane demand for TriBeCa at the time.

    Perhaps I should have just STFU and priced it at the seller’s own estimate just to get the listing, but the sellers were also “friends.”

  4. take my picture down

    walter m noel jr

  5. SlappedAss

    Here was stupid me thinking that it would be best to pitch based on a bogus high listing price AND a low commission percentage. “I’ll get you $6.5 Mil, and do it for 3.75% commission, I will need you to sign a listing agreement today, I have a buyer interested in seeing this house today. This buyer needs to purchase ASAP and your house is exactly what he is looking for” If someone is going to be a liar, might as well be the best at what you do. Go all out. Why stop at a just lying about what the house is worth? Pile on the BS, whatever it takes to win the listing.

  6. Anon E. Moose

    xyzzy,

    Some listing contracts include a saving clause for the buyer in that case, including the right to refuse a full price offer without obligation to the broker. Granted, you tick off that particular buyer. If the place is truly underpriced from the outset, they have a fix for that in the MLS (called price increase), and if the agent truly knows the value of the place, and would prefer getting something over nothing, they should be willing to oblige.

    On the other hand, ‘buying’ the listing as CF describes is distressingly common.