I just posted a blog at Active Rain that I hope you'll take a look at. It's basically the story of a homeseller who is being pressured to reduce the price on her home without any coherent explanation (in fact, the only justification the agent gave the seller was that since she had equity in the home, she could afford to reduce it!). https://activerain.com/blogsview/2564235/read-this-before-your-next-price-reduction-recommendation-
It's this sort of nonsense that gives the general public the (sadly, often correct) impression that real estate agents aren't worth the fees they charge. As Mollie said in her comment - WAKE UP real estate industry! If we don't insist on professionalism among our ranks, the public will find a different way to buy and sell real estate and it won't include us! And perhaps, deservedly so!
Okay, rant over ;-]
Jennifer, I think an even better comment was ACRE® Carole Helwig's:
"It's not brain surgery people...but it is most people's most valuable asset. We have an obligation to treat it with that amount of importance and priority."
Good post Jennifer!
I really hate hearing stories like this - it gives all of us a bad name, even those to strive to constantly do what is in our clients' best interests. I wish it was not so easy to become an agent!
Oh, Cathy, so do I. And in the interest of discretion, I didn't share the Rest of the Story... but, as I often say... the incompetence in our industry astonishes me.
I wanted to reply breifly to Jennifer's story of a friend whose agent asked for a price reduction. For me the question is has there been an offer? Or has the property been showing well and what type of feedback given? The comment of lowering the price because you have equity could be fragments from a detailed conversation about the owners wiggle room on price because of the equity level in the home.
I'm not hooked up with AR and maybe that information is provided there. I would suggest that we should withhold judgement on the agent without his side of the story. As for the industry having a large volume of incompetent professionals all I can say is that testing and education requirements at least in the two state I've been licensed in have become increasely more difficult.
I'm just asking the questions and not trying to call anyone out. So beat me up easy.
Okay, I was finally able to read the entire post from Jennifer about the reduction in price. I would agree that an explanation is always necessary if only to meet your obligation to your client. But, my approach over the last few years is to discuss the issue of declining values which lead to the discussion of a possible price reduction.
I'm not sure if anyohe has read the Realtor Mag article about the level of inventory in the market place. Well, the numbers show that at the end of September there are only 2.19 million homes listed for sale, a drop of 20 percent compared to a year earlier. They go on to say that and I quote,
"But while reduced inventories usually lift prices, in the current real estate market, housing prices are staying flat or declining. That's because demand remains soft, housing experts say."
But what I think is more telling is the professionals in the industry are saying that inventories are shrinking because some home sellers have decided to pull their property off the market instead of trying to sell at a steep discount.
Economics 101 tell us that even if supply is low, that prices will still fall if demand is even lower. If we are not telling our clients everything we are aware of in the industry and suggesting the things--even the things they may not like to hear, but in their best interest to understand in order to make an informed decision, then it is at that point we should question our true value to our clients.
Just my opinion.
The reasons for a price reduction may vary. Overpriced, need or repair, competing properties, need to sell quick, etc, etc. This may also depends on the geographic region. In Texas, we have stable or slightly increasing prices and other selected areas have increasing prices
William - absolutely true. We need to be continually watching the market and informing our clients.
Thanks for your comments. The point of the blog wasn't so much as to whether or not a price reduction was the right answer; perhaps it is... but rather that the seller's perception when his ONLY solution was to reduce the price WITHOUT any supporting documentation is that he's lazy. We can fight that perception or work with it - and the fact is that a price reduction is not always (not even most of the time) the best solution.
By the way, my friend fired the agent before asking any of the questions I suggested, not because he recommended a price reduction, but because of the way he went about it. She felt (and I concur 100%) that she deserved more explanation before giving up $50,000 of her equity - that remember, he told her they could get!
Important point Jennifer.
Some of you might be wondering what this discussion has to do with consulting and I would reply everything! One of the things that we stress with ACRE is professionalism. Particularly when you are offering a new model and because so many in our industry erroneously conflate new ways to be paid with cheap, bargain-basement alternatives, it's all the more important that we act with the highest level of professionalism.
It's very important to stress with the consumer that having a choice in the services they can receive and how they can be paid for does not take away from the services, that in fact, the services you are offering are the highest in quality.
Thank you for that, Mollie. As you and I have discussed, I feel that if consulting is promoted as simply a different compensation structure, it won't fly with the consumer. If we expect people to treat us like professionals, there's so much more to that expectation than simply charging them upfront (or variations of). We also need to behave as professionals, which means breaking away from many of the traditional attitudes and methodologies so common in our industry today. One of those being: "Price is all that matters!"
Um... if that's case... what earthly good are WE?
By the way - did any of y'all participate in the discussion at AR about dual agency? http://activerain.com/blogsview/2565134/how-do-northern-virginia-realtors-reconcile-dual-agency-against-the-realtor-code-of-ethics- She nails what's wrong with it... you're being paid twice as much for providing much less value!