An Overpriced Listing Versus an Overpriced Buyer in Sacramento

An overpriced listing is not inherently bad unless more negatives are in the picture.

If I’m gonna take an overpriced listing, I have to really like the seller. Because I know that I will be in a long-term relationship with that seller as we work toward price reductions, pulling the home off the market, putting it back as a new listing, and fielding unending agent comments about the crazy price after showings that go nowhere. Yet, little messes up that relationship more quickly than when a seller demands I discount my fee for no good reason.

Sellers like this are basically saying, hey, we want you to work like a dog trying to get a price for our home that is impossible to obtain, and we don’t want to pay your going rate. That’s three strikes, the third being brain damage. Rottsaruck there, buddy. You deserve to work with a discount agent, yes, sirree. Go hire a discount agent who will shoot pictures with a cellphone and throw you under the bus after the buyer’s home inspection. See how happy that makes you.

But I don’t tell them this because they wouldn’t believe me anyway. They don’t work in Sacramento real estate and they don’t really know our market. They don’t realize they will lose far more money than they hope to save. These guys don’t view their home as an overpriced listing because they don’t understand how appraisals work. It has never occurred to them that the home needs to appraise at the sales price.

A few weeks ago, I had an agent call me to say she had shown her buyer one of my listings and “unknown” to her, this guy snuck back over to the house, knocked on the door and offered the seller a huge sum of money. Well, we all suspect that the agent told him to do it, but can’t report the agent due to lack of concrete evidence. I called the seller while the buyer was there and had him put me on speaker phone.

Hey, Tony, I said, (not his real name). I hear you offered the seller $500,000 for this house, (not the real price).

Yes, I did, and the seller accepted it.

I have bad news for you, Tony, the seller doesn’t want $500K; the seller would really like a million dollars!

Much laughter. I could hear the seller agreeing with me.

Hey, Tony, I continued, how much money do you have?

I’ve got some money, he said.

Good, Tony, have you got an extra fifty-thousand dollars? Because if this home doesn’t appraise at the value you offered, you’re gonna have to give that $50,000 to the seller. Do you wanna do that, Tony?

Oh! I didn’t know it works that way, he replied.

In this case, I did not have an overpriced listing. I had a listing that was priced right. We were dealing with an overpriced buyer.