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Real Estate Fight Club

Feb 2020

Episode 20: Should You Take an Overpriced Listing?

February 12, 2020

In Episode 20 of the Toe-2-Toe Podcast, hosts Jenn Murtland and Monica Weakley duke it out over whether you should take an overpriced listing. Hear why Monica feels that you should not take overpriced listings and that doing so creates a huge problem in the real estate industry. Then hear why Jenn thinks you can take overpriced listings in certain scenarios. 

Episode Highlights: 

  • Should you take an overpriced listing?
  • Monica passionately argues that agents taking overpriced listings has created a huge problem in the real estate industry.
  • Agents will take overpriced listings for all the wrong reasons because they don't know how to stand up for their value. They also don't know how to educate the seller.
  • Overpricing hurts the seller's chance of selling, hurts the amount the seller will make, and hurts the industry.
  • Monica feels there is no reason you should take an overpriced listing.
  • Monica is talking about major overpricing. If you know a home's market value is $200k and you put it on the market for $225-$250 she sees that as a level of malpractice.
  • There are too many agents "buying" listings.
  • Jenn agrees that if you're doing it as a business tool for getting listings it's a bad idea.
  • Jenn says that there are times when this just happens and the seller understands what may happen if they overprice the listing but they still want to do it.
  • Jenn has done it before.
  • Monica asks about Jenn's tolerance for the amount.
  • Jenn says it depends on the price point. If you're in the 200s, then 10% seems high.
  • Monica advises that when you can understand supply and demand, then you can make educated assumptions.
  • Jenn reminds listeners that right now if you list your house correctly in their market, you'll get 98% of the list price. If you have to take a price reduction, you're getting approximately 88%.
  • As long as you've explained to them the pros and cons, Jenn thinks overpricing the home can be OK within a certain range and with a plan of action to reduce quickly.
  • Jenn pre-signs price reductions before two weeks go by.
  • She thinks you should be revisiting the price every 5-7 days.
  • There were two distinct sides to this question when they polled other realtors.
  • Many respondents said that they would absolutely not take an overpriced listing.
  • Other people said they would do it with the price reduction plan in place.
  • Monica reiterates that agents should not take overpriced listings.
  • Jenn emphasizes that taking an overpriced listing can be ok if you look at the facts and obtain pre-signed price reductions.

3 Key Points:

  1. Taking an overpriced listing may hurt the seller’s chance of selling, the amount that seller will make, and the real estate industry at large.
  2. Taking an overpriced listing may be fine if the sellers have been educated and they pre-sign price reductions.
  3. If you’re taking overpriced listings as a business tool, that’s probably not a good idea.

Resources Mentioned: