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Answers (13)
- sunnyview
- Contributions:25139
I was shocked to see that an agent posted this question. I hope for your clients sake that you already know the answer.
- Pasadenan
- Contributions:21466
It is an "excellent" idea if market value is doubling every 2 months!
It might have been a reasonable idea when the market was rapidly rising, but the bubble is still deflating.
It is a "good" idea if one has no intention of selling unless someone "desperate" for the specific house comes along, or if one just wants to tell all those cold calling agents that it is already listed and that they are violating the NAR code of ethics by trying to steal a client.
It is not a "bad" idea if the intent is to completely trash the reputation of your agent.
It may be a "helpful" idea if you can get multiple properties in an area listed well above market value in order to get something else sold quicker at a reasonable offer.
If you are a "developer", it may be a "necessity", to keep other properties in the development that were already sold from losing their value. The developer can often make up the difference by throwing in concessions.
The big problem for sellers doing this without forethought is that an appraisal contingency could force the offer amounts down, and could prevent a sale for what the seller desires, especially in a timely manner.
It might have been a reasonable idea when the market was rapidly rising, but the bubble is still deflating.
It is a "good" idea if one has no intention of selling unless someone "desperate" for the specific house comes along, or if one just wants to tell all those cold calling agents that it is already listed and that they are violating the NAR code of ethics by trying to steal a client.
It is not a "bad" idea if the intent is to completely trash the reputation of your agent.
It may be a "helpful" idea if you can get multiple properties in an area listed well above market value in order to get something else sold quicker at a reasonable offer.
If you are a "developer", it may be a "necessity", to keep other properties in the development that were already sold from losing their value. The developer can often make up the difference by throwing in concessions.
The big problem for sellers doing this without forethought is that an appraisal contingency could force the offer amounts down, and could prevent a sale for what the seller desires, especially in a timely manner.
- Frieda Triebel, "Frieda Triebel"
- Contributions:234
It is a mistake!
- Mike Parker, "MikeParkerCRS"
- Contributions:173
I guess the big questions are how much above "Fair Market" and who set the "Fair Market" number and what part of the country you are in.
If the "Fair Market" number is from a one month old appraisal and you are not in a major REO market and you are 5% or less above the appraisal, you might and repeat might get away with it.
Each market place is different in what takes a normal time to sell.
For example, Northern Kentucky in a good market was 4 to 6 months to sell, right now we are 6 to 10 months.
It can be done, but the seller and agent need to watch the market very carefully and if they see the market changing for the worst, then the seller has to get in front of the market as fast as possible.
Very dangerous game, but can be done!
Mike Parker - CRS
If the "Fair Market" number is from a one month old appraisal and you are not in a major REO market and you are 5% or less above the appraisal, you might and repeat might get away with it.
Each market place is different in what takes a normal time to sell.
For example, Northern Kentucky in a good market was 4 to 6 months to sell, right now we are 6 to 10 months.
It can be done, but the seller and agent need to watch the market very carefully and if they see the market changing for the worst, then the seller has to get in front of the market as fast as possible.
Very dangerous game, but can be done!
Mike Parker - CRS
- Lew Corcoran, "Lewis Corcoran"
- Contributions:41
It depends ...
Do you want to list your house for sale, or do you want to sell it?
In today's real estate market, the buyer, not you, determines the appropriate selling price.
By listing above fair market value, all you're doing is listing your house for sale.
If you truly want to sell it, you need to compare your home and the listing price with other homes on the market. All else being equal, if your home is price higher than another home that is similar to yours, the other home will sell - yours will not.
Do you want to list your house for sale, or do you want to sell it?
In today's real estate market, the buyer, not you, determines the appropriate selling price.
By listing above fair market value, all you're doing is listing your house for sale.
If you truly want to sell it, you need to compare your home and the listing price with other homes on the market. All else being equal, if your home is price higher than another home that is similar to yours, the other home will sell - yours will not.
- mckylie
- Contributions:5034
Waste of time.....
- Dunes....
- Contributions:3894
Who's Plan/Idea/Experiment is this?..The Client or the Agents?
The Client it seems would be playing the Lottery with their Business Transaction..their choice
Seems to me the Agent (if it's their idea) would be playing the Lottery with their Clients Business Transaction..
If an Agent talks a client into this "Plan" I would have serious doubts about their "Expertise/Value"..Play the lottery with your own money would be my thinking
The Client it seems would be playing the Lottery with their Business Transaction..their choice
Seems to me the Agent (if it's their idea) would be playing the Lottery with their Clients Business Transaction..
If an Agent talks a client into this "Plan" I would have serious doubts about their "Expertise/Value"..Play the lottery with your own money would be my thinking
- Jim Basquette CRS, CNE, "Jim Basquette"
- Contributions:1231
A common mistake sellers make is to assume that starting with a high price will net them more money after the sale. I think they feel that if an offer is made and they "split the difference" (another misguided concept), they may get what they wanted.
The reality is that the home will get few, if any, showings and no offers. After it is on the market for months or years and the price is lowered, the seller may get offers, but they will be lower than they would have been if it was priced correctly to start. What the seller expected, turns out to be the opposite.
This is also the thinking when seller choose to sell FSBO or flat fee service because it is less cost. It seem to make sense that when the home sells, they will save x%. This would only be true if the home sold for the same amount. It likely will sell for less and they net less money.
The reality is that the home will get few, if any, showings and no offers. After it is on the market for months or years and the price is lowered, the seller may get offers, but they will be lower than they would have been if it was priced correctly to start. What the seller expected, turns out to be the opposite.
This is also the thinking when seller choose to sell FSBO or flat fee service because it is less cost. It seem to make sense that when the home sells, they will save x%. This would only be true if the home sold for the same amount. It likely will sell for less and they net less money.
- hpvanc
- Contributions:2579
As a buyer, if it is very much above the market I'm not going to bother looking at it. If it is only some above, I may make what the seller considers an insultingly low offer around market value.
The only people that are going to buy above market value are cash buyers that have had a sudden windfall. How many properties are purchased by lottery winners or recent heirs of a long lost uncle?
The only people that are going to buy above market value are cash buyers that have had a sudden windfall. How many properties are purchased by lottery winners or recent heirs of a long lost uncle?
- Sinead McAllister, "Oceanside Specialist"
- Contributions:142
I can already "see what happens." It won't sell. In this market, you have to price aggressively to compete with the short sales and foreclosures. It's my opinion that an overpriced listing is a waste of time.
Good Luck!
Sinead
[hotlink removed by Zillow moderator]
Good Luck!
Sinead
[hotlink removed by Zillow moderator]
- Edyta Gryc, "SE Florida broker"
- Contributions:304
I would say-depending how much above market value. If it is only slightly above (usually to have a "room" for negotiation) may be acceptable, in other cases when the listing price is way above fair market value-I consider it a big mistake. Most likely there will be no showings, no offers etc.and the purpose is to sell-isn't it? Unfortunately for sellers, buyers do not care how much is owned to the bank, how much a seller spent on remodelling etc. The buyers will pay what they believe is a fair market value even if this means for the sellers to sell a property at a loss.
- wetdawgs
- Contributions:26833
Major mistake!
- Alex and Maria Galitsky, "TopOrlandoRealty"
- Contributions:131
It depends on the price-range. In a lower price range where most people would pay cash and not get an appraisal, you can get away with it if the property shows well and has a "Wow Factor". However, in most cases it's a mistake. First two weeks on the market are the most important time, and it's important to price it right, otherwise you will have a stale piece of inventory on your hands.
Listing a property above fair market value to see what happens. Great idea, or BIG mistake?
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- 5.0/5.0
- (3 reviews)
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