Email Elizabethbuyers don’t want to make offers on overpriced listings
Why Buyers Will Not Make Offers on Overpriced Listings
Overpriced listings are not the best thing for a seller, yet some sellers are simply too close to the product to be objective. They struggle. Well, we don’t want to leave money on the table, is a common comment. Another: buyers can make any offer they want, right? And both of those ideas are myths. It is pretty much impossible to leave money on the table in a competitive bidding situation. Followed by buyers won’t offer at all.
In my 44 years of experience in real estate, overpriced listings can happen because the agent is watching for clues from the seller. Those clues might tell the agent if she doesn’t appear enthusiastic about the seller’s suggested sales price, the seller will list with some other agent. No wonder so many people do not much like real estate agents. Some agents only want the listing instead of what is best for the seller.
I’m not saying that this Sacramento Realtor never takes overpriced listings because I certainly do now and then. There are times I can show the seller all the comparable sales, invest a considerable amount of my time not only providing statistics but my reasoning as well. And sellers will still say, “I think we should start at XYZ price because we can always come down.”
Sure, but that strategy most often hurts the seller. Agents spot the price drops, the days on market, and they want to take advantage of the seller. Human nature. I always tell my sellers the price I believe the market will bear. Then, they can make their own decisions based on facts. If they choose to enter the realm of overpriced listings, at least they know they are going against my advice.
This keeps me from feeling too badly about overpriced listings because I know in my heart I have been honest with my sellers. I don’t ever want a seller to ask: why didn’t I tell them? Because it is my job as a listing agent to convey that information.
More often than not, though, buyers just won’t make an offer on any overpriced listings. They feel the seller might be unreasonable. Or stubborn. Plus, they don’t want to offend. It really is in the seller’s best interest to be priced appropriately. But I don’t shove that sentiment down their throats. Some already do a good enough job slicing their own.
Why Overpricing Does Not Encourage Buyers to Negotiate
Buyers don’t want to make an offer when sellers insist on overpricing.
Overpricing doesn’t matter to some home sellers in Sacramento because sellers who knowingly overprice a home often have a hard time putting themselves into the shoes of a home buyer. No matter how much they try to squeeze size 10 1/2 feet into those size 9 shoes, they are still walking in the shoes of a seller. They make decisions as a seller and hope a buyer will see things the same way, when buyers do not.
When I talk with sellers about overpricing and why they need to reduce the price to a point where a buyer will make an offer, they’ll fallback on an old wive’s tale, which is not true. They will say, but a buyer can just make an offer, right? Any offer, and I will negotiate. They know that right?
No, they don’t know that. And further, they won’t do it. They don’t want to insult the seller or cause hard feelings. They might even believe the seller is stubborn, too stuck on the price, and to try to negotiate would be an embarrassment, not to mention a complete waste of time. Buyers don’t want to feel uncomfortable when negotiating. They just want to buy a home.
I realize sellers have a hard time believing that. But it’s absolutely true. I know it’s true because I’ve seen it happen over and over during my 40-plus years in this business. But some sellers still think it’s a good idea to jump on the overpricing strategy and then cross their fingers that buyers will lowball. This type of thing might work well in a classroom but not in real life, not in Sacramento real estate.
The people who are comfortable writing lowballs are the guys who won’t budge much. They’ll write a lowball on as many as 100 properties a day, hoping one of them will stick. It’s the principle of throwing enough crap at the wall until something grabs a hold. Those are not the guys these types of sellers want to sell to.
If you’re considering overpricing, at least have a plan for a price adjustment if things don’t work out. Generally speaking, if you don’t receive an offer in Sacramento within the first 30 days, you are priced too high.
