Pocket Listings and Over-Confident Sellers

The value of anything is determined when it is properly exposed to qualified buyers for a period of time. Estate auction companies know how to bring in the buyers by advertising or calling clients, and therefore they will bring higher prices on personal property sales than a Craig’s list ad might. But the Craig’s list ad might be quicker just to unload an item.

The same thing can be said about real estate in Laguna Niguel or any city. We have moved this spring and summer to a very low inventory high demand mode. Ever since the national media began to call a bottom to the price curve the numbers of buyers have increased and the best homes have gone into escrow quickly, thereby reducing the inventory. In addition there have been fewer REO sales and short sales. Some sellers and their agents have become overconfident and it has cost them money.

Here’s some advice for sellers. Don’t lose respect for the buyers. Treat buyers in the way you would want to be treated. Don’t assume they will pay anything for your home because it is the best in town. Don’t assume that repairs, cleanliness, mood and staging are not necessary. Even when buyers are frustrated by pent-up demand they can be turned off or worse yet get buyer’s remorse and walk away. If that happens you may have burned your bridges so to speak and it is more difficult to generate that initial excitement a second time. Also don’t assume buyers are stupid or uneducated. The internet has produced a super-educated real estate buyer population.

Some agents try to talk their sellers into a pocket listing or exclusive listing. In some cases this might be in the seller’s best interest if they don’t want many showings or have a security or privacy issue. An exclusive listing is where the seller instructs the listing agent to show the home to buyers but not to co-op with other agents. In my opinion this is very short-sighted and hurts the seller. Pocket listings can be listings that are officially listed for sale but the seller has instructed that the home be withheld from the MLS for some specific time.

Just remember that to receive the best possible price a property must be exposed to the largest possible pool of well-qualified buyers. Also there is more damage done by overpricing than by under-pricing because the buyers determine the market and will recognize and bid up an underpriced home.