Let’s set the stage with regard to an overpriced listing. You’re meeting with a client preparing to list their home. You go over the comps, but the client insists on a higher listing price than you are comfortable with.
All your training is telling you to stick to your scripts. Years in the real estate profession have taught you that you are the expert and you’ve done the market research to know what will sell.
But. The devil in your ear tells you, “Psst. You can sell that house and you can get a BIG commission. Take the listing.” What can go wrong?
As a matter of fact, a lot can go wrong. Let’s review why you shouldn’t be tempted into taking that overpriced listing.
- Emotion doesn’t matter. The sellers may feel strongly about the sweat equity they put into their immaculate green lawn, but buyers won’t know or care about that. So, if the seller is intent upon pricing their home at what they feel like it’s worth, it’s imperative you stick to measurable factors that sell a home, like square footage and neighborhood comps.
- The property can go stale. Some sellers may feel it’s okay to price high if they are in no hurry to sell: They can wait as long as it takes to get the price they want. However, we know that’s a faulty assumption. An overpriced house is likely to sit on the market, raising questions with potential buyers about what might be wrong with it. Once that cycle starts, you and the seller are likely to end with lower offers than you’d get if the house had been priced correctly to begin with.
- Negotiate no matter the offer. A lowball offer shouldn’t be a surprise but be prepared for some sellers to be insulted and insist you don’t negotiate. Everyone has different styles of negotiation and you should at the least explore conversations about a deal with the buyer’s agent. Stranger things have happened that solid deals emerging from shaky starts.
- Don’t assume you’ll get referrals. You might take that overpriced listing thinking it will result in a happy client and lots of referrals, but given what we know about overpricing, the client may not end up being so satisfied with the final sale price. And, if that happens, not only can you kiss referrals goodbye, but you may have the seller proactively giving negative commentary about your professional abilities.
The best advice we can give you is to not let yourself be tempted by dollar signs and that little devil on your shoulder. Trust your training, go back to your scripts on handling objections and be willing to bounce the problem off your colleagues. Bottom line: No good comes from unrealistic pricing, no matter the market.