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2018-02-06 12:01:50
Why Real Estate Agents Take Overpriced Listings

This article explains why its a bad idea to list a home that's priced too high.

Over the years a number of people have asked me why real estate agents take overpriced listings. If you are not working in the industry it is probably hard to figure out why anyone would consider this a smart practice. This is one of the dirty little secrets within the business.

There are a surprising number of real estate agents out there that will attempt to sell overpriced properties for owners, even when the agent knows the home is priced too high. These agents will accept these overpriced homes even though it goes against the basic principles of smart real estate practices. By doing so, they hurt their reputation, mislead sellers and create a hassle for their peers. So why do they do it?

There are a few common reasons why:

  1. They are not skilled at the art of properly pricing a home. Placing value on a property comes from years of experience. Some are good at it and others clearly are not!
  2. The agent may use far too simplistic valuation methods like calculating price per square foot that clearly do not work in determining accurate market values.
  3. The real estate agent does not possess the skills to beat another agent they are up against in an interview so they resort to telling the owner “what they want to hear”. They are playing on human nature – we all want and believe our homes are better than the next guys. In this case they are intentionally misleading the seller on the homes market value.
  4. The Realtor uses the overpriced home as an opportunity to get buyer clients from their marketing activities. They then sell these clients they pick up a different home. This is extremely common and one of the biggest reasons why Realtor’s take homes that are priced too high!
  5. The seller is not willing to face the reality that their home is not worth what they think it should be priced at. The agent doesn’t have the fortitude to turn them down.

These are the five most common reasons why real estate agents take overprice listings. Below I am going to give you an in-depth overview of each of these situations so you understand why a Realtor would consider taking an overpriced home.

Overpriced Listings – The Temptation

Real estate agents are people, and people are known to make decisions that do not always make sense. Even with proper training and education in the realities of real estate transactions, some Realtor’s just can’t help themselves when they see the temptation of a potential client.

These agents will say whatever they need to say to get a home owner to work with them, even quoting prices that have nothing to do with reality.

It only takes a few Realtor’s doing this to convince a seller their home is worth more than it is. Real Estate is a very competitive industry. Unfortunately this creates an environment where Real Estate agents do whatever they can to make sure they win including giving sellers pie in the sky numbers.

Remember Real Estate is a commission based business so if an agent loses the interview they come away with nothing but a sense of disappointment. This alone can cause Real Estate agents to make very poor decisions including their noses growing like Pinocchio.

One-Upping The Competition

If a seller interviews three agents, the first agent may quote a price that reaches a little high, but is at least in the ballpark of what the house is actually worth. But then the next agent interviewed knowing they are up against other agents, wants to outdo the first agent, so they quote an even higher price. By the time the third agent is interviewed, the price of the home has reached an unrealistic level.

Telling Sellers What They Want To Hear

Sometimes the problem starts with the seller. An agent may walk into a situation where the seller is certain that his home is worth far more than it actually is. The home owner may think that because his neighbor’s house sold for a certain amount, that his should too. Never mind that the other house was fully renovated, on a much larger lot and is in far better condition.

A reputable agent will tell it to the seller like it is and deal with the consequences – like missing out on the listing. But not all Realtor’s have the experience, the willpower, or sometimes the integrity, to be honest with this kind of home owner.

A Lack Of Integrity

Not every Realtor that takes on overpriced listings is a bad person. However, the reality is that there are certain Real Estate agents that do suffer from a lack of integrity. Real Estate agents are human, and it is not that difficult to reach the point where you can call yourself a Realtor.

Being a good Real Estate agent is hard work, but not every agent is willing to put in that kind of work. Some are happy to say anything to get a client, even if the client suffers for it.

What Are The Benefits Of Taking An Overpriced Listing?

An overpriced listing will rarely sell. Real estate agents know this. So why do certain agents accept, and even encourage, such listings?


The real estate agent does not have to sell the home to benefit from taking on the listing. As soon as the agent accepts the listing, he or she can put up a sign in the yard of the home for sale. On this sign will be the agent’s number, email and website. Maybe even a picture. Depending on where the home is located, this little billboard will be viewed by lots of potential clients. This helps get business elsewhere. It makes the phone ring for the agent. Do they need your home to sell? No!

Open House

Some sellers expect an open house even though they are one of the biggest wastes of time for the owner. The kind of agent that takes on an overpriced listing will likely encourage an open house, since it allows another opportunity for him or her to meet with potential clients. Even though an open house is one of the least effective avenues for selling a home, an agent who needs clients will push to have them. Trust me they are not doing it because they believe some dope will be coming in willing to pay the asking price.

The agent knows that no one walking through the door of the home will likely be purchasing it. But they may be interested in buying another home, and the agent will have other listings that he or she can steer the buyer towards. Sellers come to open houses too, so they can get an idea of what homes are going for in their area. The Realtor can possibly pickup these sellers as clients as well. Open houses have and always will be more fruitful for a Realtor and not a home owner. Real buyers schedule appointments with real estate agents!

There are many reasons why showings with real estate agents are better than an open house where anyone with a pulse can show up! This is one of the dirty little secrets of the real estate industry. Open houses are completely unnecessary to sell a home!

Fishing By Price

The reality of real estate today is most people shop for homes online. These buyers however most of the time do not know a home is overpriced until they actually get to the home and view it in person.

The Real Estate Agent can also place an ad in the newspaper or a magazine that leaves out the address of the overpriced listing. Buyers that are ready to buy a home for the price in the paper may call the agent. These buyers are ideal clients – people will to spend money on a home, sometimes a lot of money.

The Realtor then only needs to steer these callers towards his or her other listings or even another agents in a similar price range – listings they will actually want to buy.

The Realtor Still Wants To Sell The House

When the Realtor accepts an overpriced listing, in the back of his or her mind there is the understanding that eventually the home will sell if the owner will the price. If the agent waits long enough, a commission will be coming. They will just need to work a little harder for it to happen. This kind of agent will spend a good deal of time on a weekly basis badgering the seller for price reductions. Keep in mind this was their strategy going in to get the listing, so they are used to it.

Unfortunately, the final outcome will probably be bad for the home owner. Homes that sit on the market for an extended period of time often get a bad reputation. Extended days on the market are the sellers enemy. Buyers assume that something is wrong with such homes, and when they finally do make an offer, it is a low one. The agent is prepared to make a lot less money than originally quoted, but the seller is not.

Bad Agent Reputation

There are some agents that have a well deserved reputation of being unprofessional. Those real estate agents that constantly take overpriced listings get well known in their community for doing so. As you can image, sellers that hire these agents often get saddled with the real estate public thinking their home is overpriced. It is called guilt by association.

Real estate agents should not take overpriced listings, but they do. Sellers should educated themselves on the realities of pricing a home and seek out only reputable real estate agents. Failing to do so it almost always costly in the long run.

Consequences For The Seller

So what are the consequences for the seller or overpricing a home? The seller can always their price right? No big deal right? Wrong! As mentioned above, homes that sit on the market for an extended period of time become stigmatized. It is a fact homes priced incorrectly out of the gate sell for less than those that are priced properly. You can see what happens with overpriced homes by reading this comprehensive article.

This leads to the question of how to know your home is overpriced? There are some common things that can be readily observed with homes that are priced higher than they should be. It is important to recognize your mistake as soon as possible and make necessary adjustments. There is nothing that will prevent a home sale from happening more than an improper price.

Hopefully by now you understand that working with a real estate agent who will take an overpriced listing is never a wise move!

Original Article November 23, 2015 by


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Why Real Estate Agents Take Overpriced Listings

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