Fairbanks Ak Real Estate News & Info

Tonight we had dinner with a good friend (we'll call her Jill) and as usual, the topic of conversation turned to real estate. Now, Jill is one of the top four agents in town. She is equal parts listing and selling agent and does both well. We worked across the hall from each other for years before Kathy and I left to open an office.

Although I haven't been posting many the past few weeks, I'm a fanatical market tracker. I keep incredibly detailed stats on each segment of the market and have seen 99% of the homes that are on the market. While I realize there is a "feeling" factor in real estate, I can assign that feeling a number. I can't remember the last time I misjudged a selling price by more than 2%. I mention this for a reason, which isn't to pat myself on the back, btw. Stay with me for a second.

I mentioned to Jill and her husband that we had met with a potential client this afternoon who was looking to relocate to warmer climates (some folks are just lightweights - haha). Kathy and I looked at the house Thursday and met with the sellers again today to discuss pricing and review comps. The house was immaculate - the sellers had renovated just about everything that could be renovated. With only a couple of very minor exceptions, the house was flawless.

We sit down to start going over numbers and as I'm going through the comps and the adjustments I can see the husband and wife looking at each other. The kind of look that says, "Did you let this fool in our house?" I get through the comps and hand them each a summary; a single line breakdown of how I arrived at the adjusted value for each comparable. At the bottom of the summary is a line that reads "Range of Market Value - $________." I leave it blank so they don't simply focus on that and forget everything else.

Now we're down to price. I give them my range, which as it turns out is about $20,000 under what someone else gave them a few days ago, which is about 12% over what I believe is market value. I've traveled this road before and am ready. We discuss the overall market - I give them my January and February market reports and the 4th Quarter '07 report, all of which shows a still downward trending market. We discuss absorption rates - yet another handout of rates for the overall market, their general area, and finally their general area in their value range, which today is 20 months worth of inventory. It's not a rosy picture.

After about an hour Q&A session they say they want to think about it and will call me tomorrow. No problem. We thank them, scratch their dog behind the ears one last time and off we go. I'm not into high pressure. I have always believed that the right information would work infinitely better than a high pressure sales pitch. So far that approach has served us well over the years. Still with me?

Tonight at dinner I relay this to our friends as we laugh over how difficult it can sometimes be to break through the emotional value sellers have attached to their home. It is at this point Jill says something I never expected to hear. "You should have just told them you would list it at the higher price." I almost dropped my glass. When I asked why she said that if a seller is married to a price she would rather take the listing and when it doesn't sell, gently remind them the asking price was their idea and go for a reduction. "Eventually the house will sell, and probably at or close to your number, but it won't matter if I have the listing. I'll get the commission and you won't. How does walking away from the listing help?"

Not that I haven't taken a listing that was a little over market value, because I have. However, as a rule I tend to wish those sellers well and decline the listing if I can't get them within at least sight distance of what I know to be market value. Jill was adamant that I'm crazy for turning any listing down unless it's obscenely unmarketable in price or condition. "Get the listing first - deal with the price reduction once they are under [listing] contract. Otherwise you're throwing money away."

I'm having a very hard time with that train of thought. Isn't that simply "buying" the listing? Oh, sage ‘Rainers... I need your opinions... am I off my rocker for turning down what I deem unsalable listings or should I say the heck with worrying about value and just get the @^&$(# listing?

***** UPDATE****

I want to say thanks to everyone for commenting... I was truly having issues with the list at all costs approach. After reading your comments I'm still of the opinion that "list at all costs" is not the approach we are going to use. Exceptions will be made as appropriate but unless we're on the same page with respect to price I'm not biting... unless the client wants to pay my $350/hr consulting fee... then they can name their price.

As a side note the property I mention above, at least according to the comps, is worth between $245,000 - $255,000 with at least a dozen comps supporting the price. Another agent in town that is not very active just listed it for $300,000. At that price I have a better chance of being crowned the Queen of England than that house does of selling. Yikes. Thanks, but no thanks!