“My property has been on the market for a while, I’m not sure why it’s not selling.”
“My realtor is sending us houses to look at, but nothing that we want to make an offer on.”
Sound familiar? It seems in the current housing market, properties are staying on the market longer and buyers aren’t motivated to make offers. While these situations may be the result of a variety of factors, often it can be the fault of realtors. And while we certainly don’t want to be reductionist in our assessment of a complex market like real estate, we as realtors also don’t want to contribute to a slow market.
From the selling side of the transaction, what I’ve noticed are properties coming online far above where my CMA would put it. It’s caused me to stop my property research in its tracks and make sure I wasn’t missing something.
“Half of a million dollars…for that?”
A quick click through comps will show it’s on the high side. Like way on the high side. How does that happen? The first possibility is a misread of the markets, by either the seller, realtor, or both. The market here in Colorado used to be a hot one and sellers could list for essentially whatever they wanted. What followed was a near-immediate bidding war, resulting in a higher-than-list cash offer. Offer sent in, closing entered, contract signed, keys handed over. Well, not so much any longer and we may still be in denial.
However, I believe what happens more often is a realtor chasing a listing. The realtor may actually be fully aware the market won’t move on a property listed so high, but in an effort to land it and get some potential business, they give a CMA that has the seller looking at it with big, cartoony dollar-sign eyes.
“I didn’t realize our house was worth that much!”
“Oh, certainly,” is the response.
Except it’s far from certain. Well, it’s certainly a far-fetched number. The realtor knows it but there’s the off-chance someone will bite and then both seller and realtor are happy. After all,
“We can always adjust the price later to accommodate the market.”
But that’s a dangerous strategy. A property generates the most interest when its first listed and if it’s listed too high, it will sit on the market. Once the first price cut hits, the seller’s agent may have already missed the chance to capitalize. By the time the second and third price cut come in, people may be wondering what’s wrong with the property. After all, it came online $25,000 higher than it is now. It’s for this reason that NorthStar Realty agents have adopted the mantra of our owner agent:
“We don’t list properties, we sell them.”
There’s a lot to unpack there, but basically we’re not interested in seeing how many properties we can put a “for sale” in front of, but how many sellers we can help by giving them an honest opinion and moving their property for them in a timely fashion. And we all know honesty is hard to come by in any business, let alone real estate. We could certainly use more of it.
So how about on the buyer’s side? Buyers are really just interested in one thing: finding the best deal possible. We’re not here to blame them for that. We all want the best value when we purchase…well, anything. Especially when you’re talking about the largest purchase most people will ever make. Realtors can become guilty of essentially the same approach we just discussed on the seller side, though.
Here’s a familiar scenario: a realtor runs into a potential buyer at an open house, from a lead, or at the office. The buyer wants around a half acre, 5 bedrooms, 3 baths, and an outbuilding. For sake of the story, we’ll say they’re shopping in Weld County. The budget? A cool $600,000.
Well, I may have been born into real estate yesterday but I can tell you they are not going to find anything that fits those parameters.
“But why not throw a buyer’s agency agreement in front of them and tell them we’ll start looking right away?” thinks the realtor.
I’ll tell you why: because it’s dishonest! The buyer needs a gentle adjustment of their expectations, so they are aware of what a realtor is truly able to do and what they simply cannot. What they can’t do is waive their magic real estate wand and find a property that hasn’t existed since 2013 (wouldn’t that be something, though?). Which is why I’ve modified the saying for listing and selling to,
“We don’t look for properties, we find them.”
Now we’re left with a seller convinced a realtor can get them 10% above market value and a buyer convinced a realtor can find them a property 25% below market value. The seller’s agent won’t sell for that price, but they got the listing! The buyer’s agent won’t find a house for that price, but they got the client!
Realtors should be most interested in helping the client in both situations. They should also be interested in conveying an honest assessment of the market. That’s our approach at NorthStar. We certainly won’t have the most listings of any office in Colorado, South Dakota, or Wyoming. But the listings we do have, we make a concerted effort to SELL for our clients. We may not have a huge folder of buyer clients, but when we work for our buyers, we work to FIND them a property and not just look around.
