Are Sequim homes for sale overpriced? I recently received a request from someone asking me if would consider listing their property. Below is my honest email addressing the greatest single challenge homeowners and Sequim agents have right now, but no one is talking about it. As you may already know, this real estate blog talks honestly and openly about the most important issues to Sequim buyers and sellers, and these are not always issues that people talk about. I address the question are Sequim homes for sale overpriced, and I address the issues behind the question. The following is my email to a prospective client.
Sequim Homes for Sale
I’m doing some serious thinking about how to talk to clients about their listings, whether and how I take them, the listing price, and how the relationship should work during the listing period. Here is an honest email that you will probably never get from another Realtor. Few talk about what I am about to share with you.
Frankly, of the Sequim homes for sale that I have listed, too many listing clients (all good people) demand (not consult) that their listing price be above the fair market value, and despite my honesty and diplomacy with 30 years in the real estate business, they don’t seem to hear me when I say their listing price is far too high to sell in this market. Then too often, the clients start complaining and causing me stress after months of no activity, even though their decision is the cause of the problem and they cannot hear what I have been saying.
Sequim Homes for Sale Example
Here is a real life example of how Sequim homes for sale can be overpriced. I have a property listed for $400,000, but I just sold a house above that property for $370,000. The property I sold has a value that is about $100,000 more than my listing, which means that in this market as a comp, my listing at $400,000 should be listed closer to $270,000, and we would be lucky to sell it at that within the next year. None of these numbers are rocket science, but if I am right, my listing is over priced at about $130,000, and that is a huge difference to buyers. To help my clients, I immediately told them about this new sale and that they should consider reducing the listing price. I shared the details and photos of the house I sold so they could compare it themselves. Their response was that they wanted to leave the price at $400,000. That makes no sense. Maybe the clients don’t believe me, or they don’t believe the rest of the market or the proof in the comps. Maybe they just think they will get lucky. Perhaps psychologists would better understand how it is that we can get so stuck to our own detriment. Believe it or not, this has tremendous relevance to the question of whether and how Sequim homes for sale could be overpriced.
You might sense that this is frustrating for me, and I can guarantee that this exact thing is frustrating for all agents out there. Not all clients want to list Sequim homes for sale at too high a price, but the vast majority do. Some way too high. The proof that some Sequim homes for sale are priced too high is seen in the massive number of Days on Market (DOM). There’s no arguing with clients on the listing price either, because I can’t prove with any simple mathematical absolute proof that I am right and they are wrong, and every once in a great while (like winning the lottery) someone does pay too much for a property, and that kind of story gets told a thousand times for years. The difficulty for a listing agent in the beginning is there is no absolute mathematical proof that Sequim homes for sale may be overpriced . . . until they have been sitting on the market for one or two or three years. But many sellers still won’t lower the price.
Frankly, listing Sequim homes for sale costs me a lot of money (as it does every Realtor), and when I don’t sell a property, I never get reimbursed. I’m sure that if I ask clients to reimburse me, they would be shocked.
I am doing some serious soul searching as to whether listing Sequim homes for sale is even worth it. I am a successful Sequim Buyer’s Agent, and I love working with people. I do have a small number of listings, because these clients understand that I have the largest Internet presence of any Realtor on the Peninsula and what better way is there to expose one’s property to so many qualified buyers? But if I list property that I cannot sell, I am a foolish businessman and not doing my clients any favors either.
For every agent listing Sequim homes for sale in this market, this means working with what we call in the industry “high maintenance clients.” They are stressful to work with, very demanding, unreasonable, won’t listen to our counsel, and cost us a lot of money with no reimbursements. Not all clients are high maintenance clients. Many are wonderful, considerate, and understand that they must listen and leave the rest to their Realtor. (There is the caveat that not all Realtors are deserving of that kind of trust.) But the truth is, and I tread lightly here because I do not want to offend anyone, the truth is the majority of listing clients are, in fact, high maintenance clients in this real estate market. That includes wonderful people, widows, widowers, and retirees. Any Realtor who is honest will admit that in private to friends. And the truth is that most Sequim homes for sale are overpriced by varying amounts, some by a lot.
When it comes to listing Sequim homes for sale, I’m considering requiring that clients get a formal appraisal before I list their property, which will force them to deal with realistic listing prices, instead of their notion of what the property is worth in their opinion. A formal appraisal may cost a client several hundred dollars, and I know most would object to this, because they can list with dozens of agents at any price they want without having to pay for an appraisal. The truth is a listing that lasts a year costs me about $2,000, and that does not count my time at minimum wage.
I wanted to share this with you in an honest and open way. I do have the best marketing system online on the Olympic Peninsula. That has been recognized by many experts around the country, and I know it is true. I just came back from teaching almost 700 top producing Realtors in the Northwest how to market on the Internet, and I have a book that is a big hit with Realtors around the country entitled, The New World of Marketing for Real Estate Agents. But I cannot sell overpriced property, and the challenge I am having right now is that as many as 70% of homeowners want more for their property than it’s true fair market value. These are good people, too, but they sincerely believe they are entitled and should get more than the true fair market value, and they will not be persuaded otherwise.
At this point, I am trying to figure out how to talk to clients about this diplomatically but also in a way that breaks through the fog. I love working with clients and marketing Sequim homes for sale. I absolutely love marketing, especially Internet marketing. If clients truly could understand that it makes no sense to list their Sequim homes for sale too high (and they could understand what too high is) and have it sit on the market for years, I could actually list and sell properties in a reasonable period of time, because I do connect with a lot of qualified buyers on the Internet from out of state as a Buyer’s Agent. I sell a lot of property this way. I sold two in January and I sold a home last week. Many local Realtors haven’t sold a home in many months or even a year. Some have left the business entirely, and several brokers have closed their businesses. As with many areas of the country, Sequim homes for sale have not been selling in large numbers. Buyers are few and far between.
The truth is that for some reason clients make decisions about listing prices that often ties my hands behind my back and sabotages their own goal–to sell their property. Then they wonder what is going on. Nothing is going on, because they have it priced way too high. But for some reason they cannot seem to comprehend all this.
Sequim Homes for Sale Pricing Issue
Please realize that this is not a character issue in my mind. Not at all. All of the clients I have worked with are absolutely wonderful and good people. My clients and I often become good friends. I have a great deal of respect for each of my clients. They just won’t listen on the listing prices. It’s a very delicate issue, because I don’t and won’t be rude to my clients, and I don’t feel comfortable telling them how wrong they are. Homeowners often don’t listen to the polite soft spoken realities their agents share with them. It is very common for a confident person to ask their Realtor how much they think their home should be listed at, and then regardless of the answer, the homeowner proceeds to tell the client what to list it at. These kinds of conversations are so common right now between Realtors and their listing clients.
What I don’t want to do is get into another listing relationship with a client that is not seriously motivated to sell their property at a realistic fair market value. Or maybe a better way to say that is, I don’t want to get into a listing relationship trying hard to sell a property that is overpriced with a client who becomes disillusioned in the process because of their own decision on the listing price. It doesn’t make any financial sense for me to lose money like that, and in the months ahead it causes both my clients and me stress. Who needs unnecessary stress? And let me add one more thought.
I would love to hear your thoughts or your impression of what I am sharing here. These are real issues I’m writing about, although no one is talking about them to my knowledge. Maybe if more Realtors did, the public would have a better understanding of how listing and selling works in a market like this.
Chuck Marunde, J.D., Broker
eXp Realty Branch Office
143 Higgins Lane
Sequim, WA 98382
Sequim homes for sale may be overpriced but may I suggest you hire a Sequim Buyer’s Agent to represent your best interests and I am primarily a Sequim Buyer’s Agent.
Last Updated on September 4, 2011 by Chuck Marunde
I think that with the market escalating in years past then deflating alot of buyers have this ill-conceived notion that property is worth more than it currently is. Agents tend to spin the positive side with is not necessarily the reality of the situation.
I feel being strong with a customer is the best approach. Yes, there are many agents out there that will list a house at any price, but I think that is doing the customer a disservice. Educating and being a professional is what they need and deserve.
Customers who cost you money because they fail to recognize pricing reality are customers not worth having.
Some clients do not understand; they think the price they have set is perfect and they would only sell the house for that price. And later when no buyer agrees to buy they blame the agent. Such clients are difficult to handle.
The market is not in a good state; overpricing will just delay the selling process.
My father lives in Sunland. The county tax assessor had the price of his townhome about what it was the year before which was it’s highest assessment. It’s no wonder that people think their property is holding value, since the assessors office constantly validates that opinion in order to collect higher property taxes.
I told him he should get a reappraisal from the county since prices nearly everywhere else are declining and it’s unlikely Sequim is any different.