Broker and Agent Listing Price Responsibilities

Mar. 13th 2008

The California real estate market is not in one of the best of conditions right now, as we all know. As real estate agents and brokers we need to be aware on how the methods we choose use in our practice and their overall effect to the market. I bet most agents are not walking into a listing appointment being prepared to walk away. When the seller does not like the price for "Todays Market" or we use out of date data (even a few months old) to give our price opinions, we are bound to have a price reduction. When we don't pay attention to what the current market data is telling us for our price opinions we are contributing to the problem of poor market perception and unsafe investing. Every time a home is priced incorrectly for the market and a price reduction is needed on a home, that data is updated in the MLS. Current data is suggesting that as many as 80% of all real estate buyers are using the internet to search for property. Most of these people are tracking a list of properties or they have signed up to an email notification service that sends the buyer an email every time something happens in their search criteria. These price reductions are being emailed to a large section of buyers, which normally would be a good thing, right? Lets look deeper into this.

In my local market, its very clear to see what is selling, and at what price point, by keeping track of the real estate sales activity. Our market has had a dip just like every where else. Our current median price range is roughly $498k, but our median sold price is around $402k. This is a huge separation which can present a negative perception of the market every time a price reduction is updated.

In our market, which is very small, we have over 15-20 price reductions a day. Now to some of you out there this is nothing, but consider the fact that we only have around 450 properties in the market (at thats a huge inventory for us). We are a very sought after market, but nobody wants to pay too much for real estate in any market. When the buyers receive these emails they get even more spooked by what these price reductions are doing. Every buyer I have spoken to has mentioned this to me and its a topic of great debate in our market.

Some agents are extremely eager to take a listing and will let the seller dictate the price of the property, or they go in saying they will be able to sell it for an extraordinary amount just to satisfy the seller. As we all know, it can get pretty expensive to list a home even if you dont plan on advertising. The seller ends up getting upset because you haven't sold the home and the option that gets mentioned is "Reduce The Price". This happens over and over again and all of these price reductions are being tracked by the buyers.

If we can find a way to stay strong as realtors and not accept to list an overpriced listing we can help stabilize our local market and get properties listed at the correct values. This will contribute to a better market perception and the buyers who are waiting for the market to settle, will be stimulated by this activity and will act on it. These actions could help give all markets a much needed boost and help take away the bad stigma that is surrounding the market.

 

Other Aricles:

Residential Real Estate or Commercial Real Estate, which is right for you?

The importance of understanding Real Estate forms

Trust Funds

Fair Housing For All

Ethics: Use in the Industry.

An agents responsibility to disclose.

Consumer Financial Protection Bureau

The Benefits of Online Real Estate Schools

Continuing Education for the California Real Estate Agent

Choosing a California Real Estate Broker