Getting more annoyed...

User Forum Topic
Submitted by buyorhold on August 29, 2007 - 2:27pm

So, our agent suggested us to list our townhouse at a price 1.5 months ago, insisting that it was the right list price. Now that we have seen no action, we asked her for advice, and she suggests for us to lower our list price by 10%, her reasoning is that the market has gone down around 8-9% since January...

What I do not understand is that, if she knows the market has gone down 8-9% since Jan, why did she insist for us to list our house at such a high price 6 weeks ago? At the time, I had already asked why we do not list at a lower price, and she told me she thought we were pricing just right... but just 6 weeks later, she is suggesting us to drop our list price by 10%???

Submitted by aztecnology on August 29, 2007 - 2:33pm.

Since you're the client, paying for services, and making the decisions, why aren't you blaming yourself...?

Submitted by lendingbubbleco... on August 29, 2007 - 2:45pm.

make your neighbors happy...drop your price 30%

Submitted by PadreBrian on August 29, 2007 - 2:52pm.

Yeah, you are right, 6 weeks ago she could have sold the place. Now...it's a lil harder. If it's under 450k you are still okay, just mark it down 10%, which is about right, and hope Uncle Ben lowers the rates in the next week or two. Anything with conventional mortgages should sell a lil better once the rate comes down. Not really a rally, just a tiny bump before banks start dumping even more homes. So far the banks have held steady on their prices reducing things slowly. You just have to be lower than they are.

Submitted by bsrsharma on August 29, 2007 - 3:02pm.

That is a fairly common Realtor behaviour. Start at high price - pleases you, then ask for reduction if it doesn't work. But in her (weak) defence, I should add, this is such a cataclysmic time in RE that she is not any better than you in reading markets. My guess would be, as a piggington reader, you are probably better than her! My suggestion is, if she asks for x% reduction, go for 1.5 times that. Unwarranted optimism is a realtor trait.

Submitted by Arraya on August 29, 2007 - 3:46pm.

I think your first mistake is asking a realtor to price it (no offense to any realtors, some are not experienced at pricing in a down market). Take the pricing into your own hands. Get an appraisal from an experienced appraiser. Ask for as many comps a possible to get a good idea of where pricing is, where it was and where it looks to be going in your neigborhood. Then price ahead of the curve 5-10%, depending on how fast prices are declining in your area.

Submitted by bsrsharma on August 29, 2007 - 4:04pm.

arraya: It is not a appraisal issue. Even a dumb realtor shows you a pageful of comps. The genius is to predict the direction of motion by reading the market. That is where they are weak - especially if they have not seen a few downturns. My suggestion would be, in these times, hire a realtor who went through the late 1980s cycle. If he/she sold during 1989-1996, they are Kosher. Else, they have no business being your agent.

Submitted by Arraya on August 29, 2007 - 4:37pm.

Bsharma, I agree with what you are saying. However, I think you are minimizing what an appraiser does. Besides giving you a value and a pageful of comps, they also do a market analysis, which is what is needed in this case. Though, you’re correct, I am sure an experienced realtor could do a much better job than the one in question.

I think we are all in agreement that the current realtor is just pulling numbers out of there a@$....

Submitted by guitar187 on August 29, 2007 - 4:56pm.

buyorhold,

Make sure to project ALL your anger on the realtor. She is certainly the one responsible for waiting until mid 2007 to list your property.

How long have you been a member of Piggington?

Submitted by stockstradr on August 29, 2007 - 5:06pm.

I think your first mistake is asking a Realtor to price it

I know this may offend some, but I absolutely agree with above statement. Every time I let a Realtor choose listing price, I regretted it, and when I did the comp's and chose the listing price, it saved me tens of thousands.

One of many examples:

In 2003 I had a Realtor strongly advise my small condo in the far north Chicago suburbs should list for 160k. I could tell she was lying and just wanted her commission FAST.
I then did the comp's and concluded it should list for 175k.

I had read a book on the "hidden side" of Realtors which explained how they often under-list a home by 5% to yield a quick commission, knowing that it only reduces their commission by a few hundred dollars, but it costs their client tens of thousands

Anyway,
That Chicago Realtor argued with me for 2 hours, and to compromise I finally agreed to list it at 170k.

It sold in 24 hours, for 170k. Also the bidder initially offered 160k. My Realtor suggested I counter at 165k. I ignored that advice also and countered with "the price is 170k, pay it or go away!"

Savings for my ignoring Realtor's advice: ten grand!
I should have listed that condo for 180k, I could have saved more.

Another thing I've seen Realtors do: cherry pick the comp's so buyer sees a filtered comp list that misleads buyer to list at price Realtor recommends, so Realtor gets commission faster.

I've also worked with good ethical Realtors who would never do any of these underhanded things.

One more thing. I had a half-dozen Realtor friends tell me I was CRAZY to sell our San Diego condo in mid-2004, telling me it would continue to appreciate in next few years.

That condo is now worth 25% less, and most of those Realtors had to change careers once they saw real estate market COLLAPSE.

LOL

Submitted by bsrsharma on August 29, 2007 - 5:09pm.

market analysis

That is like playing football - lots of rules about blocking & tackling. What we have now is fighting in Iraq - try to help a child and you get your face blown up. An analysis doesn't mean a thing in a freefall. An example: Just how do you factor in the fact that most of the buyers may not get financing and drop out? If there are 100 potential buyers who made offers, but only 10 can close eventually, is there a market in the usual sense at all?

Submitted by michael on August 29, 2007 - 6:19pm.

She's a realtor - what did you expect.

Submitted by lindismith on August 29, 2007 - 9:33pm.

buyorhold,
how did you pick your agent?
and, what does your user name have to do with your perspective? (If you know about Piggington, then surely you know to do your homework on a listing price, so do you really need to sell, or are you just testing the market?)
Bugs is an appraiser who posts regularly on here. I think getting him to give you the right price is a good idea.
Also, SD Realtor (Adam) is very honest on here too, and you may want to ask him for help if your agent doesn't work out.

Submitted by donaldduckmoore on August 30, 2007 - 7:08am.

I am not sure what area you are living but the condo (including townhouse) market is dead. There are only few activities throughout the county. This is attributed to extremely limited number of first time home buyers because of the lending restriction.

Submitted by one_muggle on August 30, 2007 - 7:18am.

...loan restrictions and the fact that people don't want to buy those pretty tulips anymore.

BTW Anyone one to buy my Vegas timeshare or Alpaca farm in Oregon? email me at IM2SCRWD@AOL

Seriously, the condo market in SD is simply toxic. I forget the number, but isn't there a huge new supply coming on the market in the next couple years? And then there is ARMageddon peaking in a year or so.

Get a good realtor, price ahead of the market downturn and get out now. IMHO single family homes might weather the storm somewhat, but condo's in SD are tulips.
-one muggle

Submitted by Bugs on August 30, 2007 - 7:55am.

Since we're talking about a condo....

If you could get a COMPLETE list of the actives, pendings and recent solds in your zip area you could probably get a pretty good idea on what listing price would result in a sale.

If it were me, I'd look to see which agents' names came up most often among the closed sales and get their opinions, if not retain them outright. Your odds usually improve when you retain and listen to a proven winner.

As an appraiser, the only time I accept assignments that involve recommending listing prices is when the property is unusual enough that the realty agents are referring their clients to me. For most properties it usually goes the other way; I usually refer these people to the active realty agents.

Appraisers generally look to see what the property value would "probably" be like as of a transaction closing today. A good realty agent looks forward a bit in anticipation of a closed sale in the near future. There is a distinction between the two and for that reason I'm not a big advocate of retaining appraisers to suggest listing prices under most circumstances. Appraisers are observers of market participants, they don't actually participate themselves.

Submitted by no_such_reality on August 30, 2007 - 8:33am.

Pay no attention to the a__holes blaming and taking pot shots at you.

Typically, Realtors think they know the right price. They price it thinking positive and then are either right or wrong. In the case where you've had no traffic and no offers, the Realtor in this case, came to the realization they were way wrong. A 10% drop is probably the minimum and they wouldn't want to freefall more than that.

Check out bubbleinfo.com for so insight.

Submitted by PadreBrian on August 30, 2007 - 2:18pm.

Has anyone driven downtown lately? Condos up the ying yang. And building after building of new ones under construction. Another year and you can pick one up for a song.

Submitted by Shari on September 29, 2007 - 10:42am.

Your agent says the market has dropped 8-9% since January and you are mad that she didn't know this before...nobody knows trends until after they happen. In the spring, did any of you know that the lending crisis would hit during the last week of August and the jumbo loans would become impossible without 10% down and 100% financing would be extinct? This is probably what the market needs to correct the loan problem but it sure sucks for sellers who put their houses on the market in the spring and early summer. I think most Realtors try to do a good job of pricing. Half the time we get complaints because we suggest a price too low and the seller thinks we are trying to get out of doing our job by "giving away" the house; or we get complaints because we listed it too high and we should have known X would happen. It's hard to win unless the house sells within 1-2% of the list price within 30 days, and you know how often that happens!

Submitted by patientlywaiting on September 29, 2007 - 11:01am.

Hi Shari, good to see another Realtor on this board. Welcome!

Submitted by nostradamus on September 29, 2007 - 7:41pm.

I was downtown last night and blown away by all the condos for sale and realtor key lockboxes decorating iron entry gates like some kind of twisted Christmas tree except instead of gifts beneath there were homeless people sleeping. It was bizarre.

Submitted by djrobsd on October 16, 2007 - 3:38pm.

Haha.. You should see how many lockboxes are on the left side of the egyptian in hillcrest where the parking entry is!!!

Submitted by Critter on October 16, 2007 - 4:33pm.

I was walking past Crown Point Villas last week in PB - I counted nine lockboxes at the main entrance and many more among the individual villas in the back.

Submitted by Arraya on October 16, 2007 - 4:43pm.

The boom industry of the housing downturn...

http://www.sentrilock.com/

Wonder if you can buy stock?

Submitted by Bloat on October 16, 2007 - 8:15pm.

haha, just checked, they are an LLC owned by the NAR, started in 2003. Just in time to take advantage of the bust.

Submitted by JPJones on October 17, 2007 - 12:14am.

Huh. Imagine that.

Submitted by justdoitstewart on October 17, 2007 - 6:33am.

Bloat,

Where did you look up that info?

Submitted by Bloat on October 17, 2007 - 7:17am.

They stated on their "about us" page -

http://www.sentrilock.com/about.asw

Submitted by Bugs on October 17, 2007 - 8:02am.

Your agent says the market has dropped 8-9% since January and you are mad that she didn't know this before...nobody knows trends until after they happen. In the spring, did any of you know that the lending crisis would hit during the last week of August and the jumbo loans would become impossible without 10% down and 100% financing would be extinct?

Two things - our OP posted before the effects of the stock market failures started manifesting themselves in the pricing. Up until that time the pricing declines were due to the internal problems of the regional RE market.

The second thing I'd like to point out that at the end of 2006 a number of our regulars figured out that the 3rd quarter of this year would be when things would get interesting. This was based on a number of factors that would come together at the same time. Those factors included, but were not limited to: consideration of what would happen when it became common knowledge than the Spring/Summer selling season had gone bust, the inevitable increase in foreclosure activity, and of course the inability to recast an 80/20 ARM in a declining market. Obviously nobody predicted the apparent trigger event of the stock failures that led to the clampdown on financing, but some of us would argue that at most that event merely hastened the inevitable a little.

Your problem as a realty agent right now isn't that lax lending has gone away - but rather that lax lending from 2000-2006 led to the excesses that must now be corrected. Exactly what event triggers the correction is but a footnote. The roots of this correction lie within the excesses that preceded it.

BTW, the realty agents who participate on this site all knew this would happen long before it did and they knew that chasing the market down with a too-high list price would only result in problems. Had our OP gone with one of them instead of the idiot they went with that condo would have been sold by now.

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