Nothing is more frustrating to Leavenworth home buyers and real estate agents than a new listing that comes on the market in the spring at a price high above market value. I understand the motivation of the seller to get as much out of their property as possible, but their real estate agent should know better.
It is not always done on purpose, but sometimes this is done just to get the listing and in the real estate industry we call this “buying the listing.” This is specifically addressed in the REALTOR Code of Ethics:
Standard of Practice 1-3
REALTORS, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.
Unfortunately, I don't think many REALTORs are being reprimanded for this behavior.
I mean really, it's 2012, didn't you get the memo? Home prices have fallen since the real estate boom of 2006-2007.
With the snow melting, we spend a good portion of our time doing market analysis for home owners. This includes time in front of the computer, but also time in the field previewing houses around Leavenworth and Lake Wenatchee and talking to other agents and appraisers about values and market trends. (You can click here if you are a homeowner thinking about selling and want to know the value of your Leavenworth home.)
Homeowners have a plethora of reactions after we prepare our report:
- They hire us to sell their home. Upset by the loss of value, but appreciative of our skill and honesty.
- Decide that it's not worth it to them to sell in today's market
- Hire another agent who will list their home at a higher price
Many of our clients over the years are clients who are re-listing their home after being wooed by the siren song of overpricing the previous year. Unfortunately, it's much easier to sell a home when it first comes on the market and there is some stigma attached to homes that have been on the market for an extended period. These are often called "stale" listings. We usually can help these sellers, but we are certainly playing catch up.
Still not convinced that you should be aggressive about listing your house at market value? I'll leave you with one more chart - after all, a picture is worth 1000 words.
The chart below demonstrates the danger of overpricing, even when the motivation is to build in "wiggle room" to the price. ( I wrote previously about the "myth of wiggle room.")