Purpose

Improve the business’ bottom line by selling every listing. Overpriced listings take longer to sell (if they sell), cost much more to sell, often come with reduced commissions, and generally result in worse relationships with the clients because of the disagreement in positions and the perception that Realtors “only pressure you to accept any offer that comes along.”

Philosophy on Pricing

Taking an overpriced listing can present several challenges for our team:

1. Difficulty in Selling: Overpriced properties are harder to sell. They tend to stay on the market longer, which can lead to a negative perception among potential buyers.

2. Reputation Risk: Your reputation as a realtor is crucial. Consistently listing overpriced properties can harm your reputation, as clients and peers may view you as someone who sets unrealistic expectations.

3. Client Relationships: If a property is overpriced and doesn't sell, it can strain your relationship with the seller. They may become frustrated with the lack of progress, potentially blaming you for the lack of interest.

4. Marketing Challenges: Marketing an overpriced property can be more difficult and costly. You may need to invest more time and resources into marketing efforts, with a lower likelihood of success.

5. Opportunity Cost: Time spent on an overpriced listing is time not spent on potentially more profitable and realistic listings. This can affect your overall productivity and success.

6. Price Reductions: Often, overpriced listings eventually require price reductions. This process can be frustrating for sellers and may make the property less attractive to buyers who notice the price drops.

7. Market Analysis Credibility: Part of your value as a realtor is providing accurate, data-driven market analysis. Taking on overpriced listings can undermine this aspect of your professional expertise.

8. Buyer Agent Perception: Other agents are less likely to show overpriced properties, knowing that a fair deal is less likely, and their clients may be less interested in viewing such properties.

In summary, while it might be tempting to take an overpriced listing, especially in a competitive market, the long-term costs often outweigh the short-term benefits. It's generally more productive to focus on realistic pricing strategies that align with market conditions and client expectations.

How to Avoid Overpricing

Avoiding overpriced listings and getting our seller clients to agree with your suggested price involves a combination of clear communication, education, and effective market analysis. Here are some strategies that might be helpful:

1. Educate Your Clients: Start by educating your clients about the current market conditions in Ottawa. Use recent sales data, comparable listings, and market trends to provide a realistic picture of what their property is worth.

2. Provide Comprehensive Market Analysis: Prepare a detailed Comparative Market Analysis (CMA) that includes properties that have recently sold, are currently listed, and those that failed to sell. This will give your clients a clear understanding of where their property stands in relation to others in the market.

3. Set Realistic Expectations: Be upfront about the potential consequences of overpricing, such as longer time on the market, reduced interest from buyers, and the possibility of selling for less than if priced correctly from the start.

4. Use Visuals and Stories: Sometimes numbers alone aren't enough. Use visuals like graphs or charts to illustrate market trends. Share stories or case studies of similar properties that were initially overpriced and the challenges they faced.

5. Leverage Your Expertise and Experience: As a realtor, your professional opinion carries weight. Emphasize your experience in the Ottawa real estate market and your understanding of what works.

6. Discuss Pricing Strategies: Talk about different pricing strategies and how they can impact the sale. For instance, a slightly lower price might generate more interest and potentially lead to multiple offers.

7. Be Honest and Direct: If you believe a client's price expectation is unrealistic, it's important to be honest with them. It's better to turn down a listing than to take one that is unlikely to sell.

8. Offer Testimonials or References: Share testimonials or references from past clients for whom you've successfully priced and sold properties. This can build trust and credibility.

9. Stay Updated on Market Changes: The real estate market can fluctuate. Keep yourself and your clients updated on any changes that might affect property values.

10. Negotiate and Compromise: Sometimes, you might need to negotiate with your clients. If they insist on a higher price, you could agree on a plan to lower the price after a certain period if the desired results aren't achieved. Get this commitment in writing, signed by both parties.

Remember, your goal is to create a partnership with your clients where they trust your expertise and feel confident in your ability to represent their best interests in the real estate market.