We are seeing many listings get price reductions, some are getting multiple price reductions in a short period of time. In my opinion, while price reductions are a regular part of the business, and while a slowing market increases the pace of price reductions, there’s another important reason for so many reductions: overpriced listings. A Sacramento Broker, Elizabeth Weintraub, said it well:
As a seller interviews each agent, often the estimate of value creeps upward. Maybe the first agent knows there will be two other agents competing for the listing, so the first agent names an astronomical figure. The second agent, upon hearing the first agent’s price, beats it. The third agent comes in higher yet. A seller who chose an agent based on which estimate is highest is the ultimate loser. Yet almost every seller operates in this manner. It’s a shame because so few agents take the time to educate sellers that other factors such as marketing plans and the agent’s negotiation abilities are far more important than estimate of value. The comps speak loudly if anybody looks at them. Ultimately, the market place establishes value.
From a Realtor’s perspective, getting a listing ought not to be some sort of bidding process: the highest bidder gets the listings. The seller will lose every time. That’s my opinion. Of course, I could be wrong.
Last Updated on April 3, 2010 by Chuck Marunde
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