Long time readers know that I love the mixed bag that is Realty Times. One of my favorite columns is Ask Realty Times, which was fielded yesterday by Peter Miller. There was a question asked yesterday that could have been written by a great many sellers across the country. While Miller’s advice wasn’t bad, I thought I would run the question by Doomers- I suspect that there might be-um, alternate suggestions. [Please keep it clean and anatomically possible!]
Here’s the question:
My husband and I listed our home with a broker because he sold us this house several years ago. He gave the job to his son who is an agent in his office, but the son has not been aggressively marketing our property. For several months we have been trying to find out what kind of marketing is being done and making suggestions, but they are slow to move.
Yesterday the father called to lecture us about how he "can’t do anything" unless we drop the price by $25,000. We have already dropped the price by $25,000 and have fewer showings than at the higher price! We now think he is essentially telling us that he isn’t trying to sell the property because he thinks it’s priced too high. Mind you, it’s priced comparably to other homes in the neighborhood.
How can we get out of our listing agreement with this broker?
For Fisher’s answer, click here and scroll to the bottom. Have a better suggestion? Post away!!!
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“Mind you, it’s priced comparably to other homes in the neighborhood.”
Are those “asking” prices or are those prices the other homes have already sold for & closed escrow?
When did they sell? ie: before subprime blowup with 100% financing, or within the last couple weeks?
Either way…
If I was the (soon to be) REALTOR, I’d calmly and briefly explain exactly what I’ve done so far to market the house, what it’s cost me to do it, and ask her consent and agreement to cancel the listing and go with another Broker.
I’d also suggest politely that if she wants to sell it by a particular time for the TRUE (supply & demand based) market value, to consider a very well advertised auction strategy.
That’s probably as close to a compromise of quick sale and market pricing as she’ll find.
DISCLAIMER: This is ALL predicated on the fact that I would not and did not rave when I sold her the house a few years ago about how “prices never go down, your house is your best investment, and you can “always” refinance in a few years when the value skyrockets.”
Finances, pricing, and speculation values were not mentioned in the question, but those things have been so common I felt they should be listed.
There was a house around the corner on the market for say a month I saw a sign that said sale pending. Only on the market I’d say a month (in feb/march 07). I said to myself the market must be coming back and about 3 days after the sale pending sign went up there were pods in the driveway. These folks were ready to go. About 2 days later the sale pending sign was gone. Offer made, offer accepted, three happy customers, seller, buyer and real estate agent. There are 3 foreclosures on the street and several for sale and I thought the house must have been spectacular to sale that fast but alas with all the problems with the mortgage industry, No one anticipated that 20 down 30 year fixed. So the house is back up for sale again. (with pods in the driveway nothing like letting people know how desperate you are)
Also I want to comment on the actual reason I came here. Why didn’t the real estate agent tell his clients to offer to pay the mortgage payments for 6 months, furnish the living room, brand new appliances and a new 2008 HUMMER in the drive with a full tank and a fresh ATM to purchase gas for a year. Betcha that would get it sold in a hurry. Oh yeah and pay the down payment and all the buyer would be responsible for is the 30 year fixed. Show me that house and I will buy and move no matter where in the country. If no one elses property is selling why do these people think they have the best house in the world. That is what is wrong the game is over and people don’t want to take the third place prize. It’s first place or nothing and these people will soon realize that they are coming up with nothing. There is no way you can get anything anywhere for nothing and that is what happened with the subprime and alt-a. They wanted something for nothing. I say pay me now or pay me later but your gonna pay me.
There are neighborhoods in the Phoenix SE Valley that aren’t seeing any sales. All the houses in the neighborhood are priced comparably though. Having your price in the middle of the pack isn’t useful if all your neighbors are nuts.
Asset Hunter is right- what are things SELLING for? (Now, not what Joe down the street got last year.)
It’s possible the broker is lazy- or he’s not selling much these days and doesn’t have a big advertising budget. I noticed though that this seller isn’t saying “Everyone’s home is selling around this price but mine.” At that point I figure you have a broker who’s not doing his job.
Even in Phoenix, Las Vegas- people are still buying homes for the right number. It sounds suspiciously like the broker is trying to tell this seller that he can be one of the lucky ones- if he’s willing to price his home competitively.
Well first question is, how long was the listing for? There are some Realtors that will ask for a year (and oh God! get it which is suicide.), but more likely 6mos if the norm. So how far along on the list are you would be my first question. If you only have a month to go to expiry, just sit.
But lets dump some suggestions when they reup for another Realtor:
[]You the seller are paying for their expertise with a commission. Insist on a couple of things 1) They show you comparables, $/sq ft, cost of new construction $/sq ft, competing properties within 5 miles of you.
2) They show you these facts out of the MLS book as to the competing properties.
3) What material quick fix things you the seller can do to present the best appearance quickly.
[]Never ever sign a long term list!! Today in my view even 6mos is too long. Do a 90day exclusive with an agreed 90day reup if they themselves have shown at least X buyers or Y contracts in the given period. You want to force performance.
[]Ask about both their offices’ rank within their MLS branch and the salespersons rank within that same MLS system. Oh an be coy and ask who is the worst Realtor they ever competed against? If you are going to deal with a Realtor, work with the top 15%. Knowing who blew their socks off gives you the lead for the phone number to call after you tell this turkey you want to think about it a while.
One other observation for the seller. Go find some mortgage brokers. Ask them if they would be willing to set up a ‘buyers package’ for mortgage pricing, terms and qualifications for the home. Tell them you are thinking of going FSBO. Irony is, once you reverse engineer the package you will know what the market bears for the price of the house. That is probably a franker appraisal than what the Realtor gave you.
Note I have not touched on the getting out of the contract. Chances are slim. Realtors have been dealing in this for 50+ years and their listing agreement is very hard to get around. One would have to show gross negligence which is hard to prove.
Realtors are victims of market conditions. Price, location and condition are the determining factors in selling a home. No Realtor can force a person to purchase a home. Yes, I am a broker in Phoenix. Each day I get at least 100 emails of listings from other Realtors. I also get them from California, Florida and other states. There are so many they become meaningless.
There are many, many homes on the market for much less than their original purchase prices. They are not selling. If you need to sell, you drop the price WAY below the neighborhood, not competitively priced WITH the neighborhood. Unfortunately, many people financed with funky loans thinking they would only hold for a short period of time.
There are a large number of listings coming into the Phoenix market daily. People holding the funky loans are beginning to realize they are in trouble. Trust me, panic selling is underway. The problem is that so many loan holders went 100% financing and, as a result, are upside down. They will lose their homes. There is no way out for them. Some of them have already pulled 100′s of thousands of dollars out in refinancing. It is not uncommon to find homeowners with 10 – 15 home loans in the last 3 or 4 years. What a world!!
To me, a homeowner is a person who has a home without a loan. Otherwise they are loan holders living in homes with the possibility of owning them.
SteveC-
Thank you for your comments. You are right- all the glossy brochures in the world aren’t going to compensate for the fact that the house is overpriced. Many of us remember the Bohall’s, who managed to have their property mentioned on the evening news and the East Valley Tribune. They offered a vacation and a flat screen TV. I never personally saw the property, I suppose there might have been a problem with it, but it looked suspiciouslly like when it came down to it, the price was too high. They eventually pulled it off the market.