Emotional sellers and inflated prices - do RE agents need to give them a reality check?

I've bought and sold a number of properties over the past few decades (mainly PPoR), and I'm noticing now, more than ever, that sellers aren't really paying attention to the current state of the market in their area, and pricing their places accordingly.

I know that RE agents will often tell potential clients what they want to hear, ie. "Your place can fetch $XYZ", knowing that the agency that gives them the highest dollar amount is likely to secure the sales contract. However, at what point do agents need to make their vendors aware of the reality of the local market, and help them price their place to meet the market.

I've viewed two properties in my local area in the past week - I know the area, the transport systems, best/worst pockets, ages of houses in the different pockets etc - and have a pretty good idea what the places should fetch, in what is a rather stagnant local market. I reckon one place should be around mid-to-high $800K, but the vendors have already knocked back an offer of $880K and one of $910K - they are hoping for mid-to-high $900K. The other place should get high-$800/low-$900K (maybe mid-$900K, at an absolute stretch), but they've knocked back an offer of almost $1,020,000 (and it's been on the market since May 2018 - which should tell them something). According to the vendors, it's worth sooooo much more... ).

The RE agents are saying that they can't get sellers to budge. So, I'm wondering who who told the vendors the suggested selling value of the properties in the first place?

You'd have to hope that these guys aren't desperate to sell

 

Are your ideas of pricing realistic?

You say offers have been made on both properties well above what you think they are worth.
Marg

 

Its up to the vendors, the best the agent can do is to simply guide them as to whether they should accept an offer or not.

 

Buyers want agent to crunch sellers, sellers scream murder.

Poor agents.

 

It's the opposite in my neighbourhood, agents selling at lower than expected prices to get quick sales (my house sold in 12 days for $345k agent said it was worth $320k, i had to persuade them to list it for a figure of $350k.
Have seen many houses sell for less than they should be worth, but i guess if both parties are happy, just think the REA is doing a disservice.
October 2017 for reference.

 

l have had similar experience ... are by chance talking about Baulkham hill property

 

Good point, and I may be on the lower side of what I'd imagine that they'd get. But after checking recent sales in the area, with the same specs/condition etc, I'm pretty sure that I'm in the ballpark.

 

True, but it's always been this way. However, I don't think I've ever seen such a huge gap between vendor expectations and market reality.

If it was the Sydney/Melbourne market of 12+ months ago, I'd understand it, but these properties aren't in either of those locations, and the local market in this area for houses built in the early 1980's (small bedrooms, and some with 'original features' - or very close to them) shouldn't be asking the same amount of $ as the new builds with the same number of bedrooms etc.

 

I see this a lot in Darwin. It's blatantly obvious here as these people are still asking top dollar in a market that is down 30 percent.

I've talked to many agents who are just as frustrated. The owners just won't budge on price. You'd think that after being on the market for 6 months that they'd get the memo....but no.

 

As a seller you stick to your guns - until you don't.

As long as market conditions are reasonable then you don't need to accept the first reasonable offer that comes along. Sometimes it is worth holding out for that emotional buyer that loves your place to come along.

 

2 Properties and 2 potential buyers both have valued them and made offers higher than what you think it's worth and less than seller thinks it's worth. .

 

If an Agent can't sell it for what the owner wants. Then why keep it on their books and waste their time trying to sell it? Greed or desperation?

 

Depends where you a looking. The areas I'm watching in Melbourne (bayside), only the A properties or the cheapest units are selling. Even then, discount from asking price is the norm. Everything else is just sitting there.

People tend to believe the downturn doesn't effect their property. Some will pull their properties, some will adjust expectations. It takes a lot longer for people accept losses than gains.

I expect by mid year, the boom will be far enough in the rearview that serious sellers will have adjusted.

 

I also noticed huge gap between RE agent expectations and reality. I already mentioned a case when RE assessed a Balmain house in 2.1-2.2M range, but it sold @ mid 1.6M. Same is for Shire, some agents claim their houses in 1.8M range when comparable sales are in 1.3-1.6M range. They are still in denial phase.

 

So you have personally seen everything for sale and compared it all have you ?

 

Where did he say that?

 

not everything. I compared properties that I inspected (sold vs 'open for inspection')

there is no doubt RE agent expectations are too high. Look at auction results. Low clearance rates indicate sellers want not what buyers expect to pay.

 

Have not noticed 1.8million dollar listings selling for 1.3/1.6 in the shire .

Maybe but not in the premium areas I keep an eye on.

Unless maybe fibro development sites that were prepped to be potentially duplex sites. This so the only market that has eased off dramatically.

Buy definitely softer market in the shire as well.

Sale near by I was keeping an eye on was advertised for 2.23million sold for 2.2 million hardly a discount. Settled a couple of weeks ago . ( 2 Immarna Ave)


Premium properties in shire many are upgrading or money closer to water. They could afford to hold for every and don't really care what market now doing they want the price and we're willing to hold for as long as needed.

 

Are you serious? Who gives a toss about the Agent? They work for the vendor, not the buyer.
The vendor has every right to hold out for the best possible outcome for them as they are the owners!

 

I inspected a dog the other week, when I got there, realised it also had fleas. Agent advised that the owner had dropped price by 20% since listing.

As there were fleas, we didn't make any offer as such and said we'd wait/pass. Agent hinted there was still a little room to move.

For me to be interested, I need another 20% off, as I can neither cure all of the fleas or convert the dog.

I'm not holding my breath but they may come back to me.