Several years ago, I was just about to start teaching a class on pricing houses strategically when an agent approached me. He was a nice looking young man (approximately 32 years old) and he looked determined.
After exchanging pleasantries, he said, “I want you to know why I’m here. Last week I had to tell my 5-year old princess that she could not have dance lessons. It broke my heart“. I could see he was getting angry as he continued, “The reason I could not pay for those lessons is because I spent too much money marketing a listing. I’m okay spending money to make money but at some point I realized this house would never sell…it was priced too high and the sellers refused to budge. Now I have a lot of money sunk into a house with no chance of recouping my investment and my family is suffering because of it.”
Sadly, that’s not the first time I’d heard a similar story. But I do have an update for you…
The consequences of an overpriced house can be totally staggering for you.
With that said, here’s my top 5 consequences of an overpriced house for you, the agent:
5. Destroys Your Confidence
Many people believe we sell houses…but that’s not true. General brokerage agents sell his/her service package. In order to be good at selling the product I’ll call, “You, Inc.” requires confidence that the product can deliver its promise.
An overpriced listing can fill an agent with self-doubt. Self-doubt erodes confidence. Lack of confidence means less willingness to promote the product. And that’s bad…
4. Ruins Your Reputation with Consumers and Agents
Here I have a little myth busting to do…The number #1 rebuttal I hear from agents when discouraging them from taking an overpriced house: Having a sign in a yard is always a good idea!
For better or worse, when you take a listing, you and that house are attached together. If that house is exciting and looks good; so do you. Your reward will be new buyers and sellers because people like affiliating with a winner.
If that house is sad and tired and rejected; then so are you. The consequence of that is people believe you can’t do your job, which of course brings even bigger consequences.
3. Makes You Hate Listings
Not even once have I gotten off the phone with a seller who is mad and thought, “Okay, I need to get more listings!”
Many agents report running toward buyers after having an overpriced listing. What’s so bad about that you might ask? Well, several things actually:
While a buyer may get you a commission check, buyers don’t provide you any leverage for your business. Yes, they could send you a referral, but most don’t. Not because you didn’t do a great job but because they don’t know that’s how it works.
A listing builds your business by providing opportunities to get more listings, buyers, promotes your brand, provides social proof, and the list goes on and on.
If there’s an agent you admire, more than likely that agent is a strong listing agent.
2. Prevents You from Taking Other Good Opportunities
Every piece of business (buyer and seller) has a cost of lost opportunity. While you are working with a buyer or seller, you are missing out on another one. One of the tenets of being a strategic agent is accepting the concept of lost opportunity and picking where you use your energy wisely. When you are working with a seller with a bad price, you are missing a seller that is motivated and willing to put on a good price.
1. Sucks You Dry of Time, Energy, Enthusiasm and Money (TEEM)
Overpriced listings deplete all of your resources, drags down your business, and makes you cry for your momma. Nothing else needs to be explained about that.
So what are you going to do about all of this?
I have a suggestion…take my free webinar: How to Get a Reasonable Asking Price from Unreasonable Sellers: Discover a 3-Step Process. Find the details and register here.
P.S. Did you watch the video at the top of this page? If not, you missed the end of the story on how that young man so frustrated at the beginning of my pricing strategically class is doing NOW in his business.
P.S.S. Have you joined our Strategic Agent Facebook Community Group yet? If not, you’re missing out on some great conversation, tips, special offers and great idea sharing! Click here to join today.