The reason for the RE sales industry blame here is that listing agents are taking a listing KNOWING they will have to overprice it from the get-go, to appease their seller-clients, in HOPES that their clients will EVENTUALLY be motivated enough to lower the price in order for it to sell.
The best time to get an acceptable offer is when the listing is brand new, because often there is a buyer waiting for a same or similar property in that location to come on the market. After it has been reduced one or more times, the listing could become stale and/or less desirable in the eyes of buyers.
IMHO, listing agents should have the “Come to J@s*s” conversation with their seller-clients at the time of taking the listing about their property’s true worth to potential buyers. Most listing agents won’t do this for fear of alienating the seller and losing the listing.
But “moving sideways” in a stagnant market isn’t doing anybody any favors – it just wastes everyone’s time.
I understand it’s sometimes hard to tell what the final selling price will be in a falling market. In that case, often a VRM is used just to invite negotiation. However, this still leads a potential buyer to believe that the seller(s) won’t “entertain” any offers below the VRM.
I DO believe the overpriced inventory currently languishing on the market is the fault of the sellers. Other than having their sign in the yard (doesn’t impress anyone unless it sells), I often wonder why listing agents would bother with recalcitrant sellers who won’t lower their asking price to the market and because of that, there is no activity on the listing. It all boils down to seller motivation and secondary to that, their agent’s insistence on pricing the property for the current market conditions.
I’m speaking here of sellers WHO CAN lower their prices enough to sell. The vast multitude of sellers who must sell short should work these problems out with their lender PRIOR to marketing their property, so it is priced correctly out of the gate.
