Coldwell Banker promotes price reductions
Real estate brief
By Inman News, Monday, October 6, 2008.Coldwell Banker Real Estate LLC is promoting a sales event during which participating sellers who have listed their homes for sale through a company agent will drop their asking price by up to 10 percent.
Borrowing a page from the marketing plans of home builders and auto dealers, the "10-Day Sales Event" will run from Oct. 10 through Oct. 19.
"Our research and discussions with our brokers and sales associates shows that in many markets sellers remain reluctant to list their homes at the proper prices necessary to attract buyers," said Jim Gillespie, Coldwell Banker president and CEO, in a statement.
"It's our hope that the Coldwell Banker 10-Day Sales Event will move buyers off the sidelines and into the market. We are embarking on this initiative -- which has never been done before on a national basis -- because we believe it is critical for Coldwell Banker, as an industry leader, to help serve the needs of those individuals listing homes with a Coldwell Banker broker and to help move the U.S. real estate market in the right direction."
The announcement referenced a company survey of 3,379 Coldwell Banker real estate professionals -- 56 percent of respondents said that the listing prices in their market areas "remain above where they need to be to attract qualified buyers."
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Submitted by Steve Simon on October 6, 2008 - 8:50am.
The only sellers that should participate are the ones that must sell. Any other seller that lowers their figure to join this club is not thinking very clearly.
That being said, it will probably be a huge success:)
If the answer to a complex problem is very simple, it is usually incomplete...
Steve Simon is the lead instructor at the Steve Simon School of Real Estate www.stevesimon.us
Submitted by Keith Labrecque on October 6, 2008 - 9:37am.
It may be a "huge success" but what kind of seeds is it sowing? A contest of markdowns by all brokers? Jeez-Louise, use your heads Coldwell! This is short-term thinking at its finest!
Keith Labrecque
Labrecque & Associates
Louisville KY
WE Buy Houses FAST
Submitted by Bruno Skopinich on October 6, 2008 - 12:51pm.
"if it doesn't Sell... Raise the Price!"
Of course this is a good idea. Remember the laws of "supply and demand" economics 101.
Goldwell Banker is Smart. And I do not even work for them.
Submitted by Vince Ciroli on October 6, 2008 - 1:06pm.
This is more like a race to the bottom...price cutting just gets more price cutting. This sounds more like a revenue hunt on the part of Coldwell Banker. While many homes are indeed over priced, price cutting hurts all other homes on the market.
While many believe we have just a supply problem, we may also have a "demand" problem. It is now more difficult for borrowers, especially with "Jumbo" financing needs or for those that need larger down payments.
The way out of this problem is much more complex than just a 10% off fire sale.
Submitted by Tere Episale on October 6, 2008 - 2:01pm.
I certainly would not recommend that my clients reduce thier property listings by 10% across the board including every price range. I believe that proper consultation from the "get-go" is most beneficial. Sure, we have been "chasing the market" for some time, however home sellers are listening and watching the news too and have been very receptive to price adjustments for the most part.
I think a 10% "discount" for all price ranges is a bit extreme.
At least here in my area in Northern New Jersey I have been successful in my listings selling through this tough time.
Submitted by Sally Melby on October 6, 2008 - 3:29pm.
Guess some of you missed reading the "up to" 10%, Sellers have a range option. I don't know about you but I would rather have an offer to work with then sitting on inventory. Does anyone really know a Sellers bottom line? The purchase offer could include other appealing variables, you can always negotiate up and the Sellers isn't required to accept the offer.
I'm proud to be part of a group thinking outside the box.
Sally Melby
Coldwell Banker Wardley
Las Vegas, Nevada
Submitted by Sol Sek on October 6, 2008 - 3:38pm.
This is nothing more than an encouragement for sellers to discount their price. The problem with trying to determine market value in today's market( find the perfect listing price ) is that it's a guessing game at best.
For example, getting consumers to discount 10% from a list price that is 30% above what buyers are willing to pay would be ineffective.
In a market where comparable homes are selling for 20-100 percent price differences, it'll take more than 10% below asking price to sell.
Additonally, how can many of the sellers sell when they don't have even the equity to pay the real estate commission or to pay off the loans?
Sol P. Sek
Forsalebyweb.com
Founder/CEO Forsalebyweb.com
Where You Name Your House Values
Submitted by Eliese Pivarnik on October 6, 2008 - 4:26pm.
Unless a buyer HAS to buy, I don't see how a price reduction for ten days will make much of a difference. If I were a buyer, I'd think if the seller lowered his price once, he'll do it again. When I'm ready.
Steamboat Springs Real Estate Blog
Submitted by Joseph Ballarino on October 7, 2008 - 4:57am.
This is a bad idea in so many ways it's not even funny.
- Each home needs to priced correctly based on current market conditions
- How many will raise the price to be able to participate
- CB doesn't own the properties so they can't have sales like builders
- Negative press will say Realtors are forcing prices lower and they only care about earning the commission, not getting the best terms for the seller they are representing
and I can go on...
Joe Ballarino
Amerivest Realty - real estate
Submitted by Vito Boscaino www.ServingColumbus.com on October 7, 2008 - 7:03am.
So as was quoted in another article on this marketing program, Coldwell Banker did an internal survey and found 77% of respondents thought Seller prices were too high.
The immediate question that came to my mind was what kind of job were these agents doing for their clients to begin with when many of them obviously took over-priced listings?
Either the agents were incapable of doing a proper pricing analysis and communicating why getting the price right is so important, or they were simply desperate to get listings, knowing full well that the chances these properties would sell was very low.
Regardless, this all reflects very poorly on Coldwell Banker. Plus it smells like desperation is in the air. The ad looks like something you would see for the local discount furniture store that is "always" having a one-time sale.
What a poor marketing exercise. One has to wonder just how bad the financial performance of Coldwell Banker must be when they have to resort to a gimmick like this.
Submitted by RK Ruthman on October 7, 2008 - 9:46am.
Coldwell Banker has an interesting Plan A, with definitely a Plan B ready for action.
If these Sellers agree to reduce the price of their property up to 10% for those few days, AND NO ONE MAKES AN OFFER, then Coldwell Banker can inform the Seller that the only explanation could be that the property is over-priced, and to either keep it at the "new reduced price", or to discount the sale price of the home even further.
Plan A: Get Seller to Discount home price
Plan B: (If home doesn't receive offer at new discount price - ask for deeper discount price)
Plan C: Competition's Plan
Coldwell Banker is either going to kick start their home sales, or sellers are going to kick out Coldwell Banker.
Check out Coldwell Banker listings in your area, and get prepared to market to those cancelled listings! :)
Submitted by Sol Sek on October 7, 2008 - 6:46pm.
When the market was easy anybody could claim "With my experience and value I deserve a full service commission". Consumers didn't care because their houses were selling and people were depositing closing checks faster than they could realize the commission paid.
Apparently the market has proven that this is not the case when ít's slow. It's an embarrassment to the industry that the only solution the public can expect from agents is a price discount.
Let's admit the fact, consumers have no idea what their house is worth in today's market- And agents can't come up
with reliable comps. To jump to conclusion and guess asking prices and force people to drop 10% of their price is admission of LIES.
When consumers are encouraged to drop their price by 10%, I hope the agents have the decency to drop their commission as well since sellers can pass up many ( if not most ) of their buyers due to incorrect pricing.
Sol P. Sek
CEO/Founder, Forsalebyweb.com
Where You Name Your House Values!
Submitted by ambrish patel on October 8, 2008 - 10:05am.
After reviewing what is said so far, we all know the saying what goes round comes round, when the market was so called so good due to supply and demand.
And at time my fellow professional colleagues, recently licensed and recruited were listing and selling home, which most of them belonged to either their relatives or friends, at the price? As to what the next door homes went for, that is to say, a million dollar home made of top quality materials, worth every penny, what it cost to build and now there this is this broken down-neglected home next door, sold for the same price, just because, it was same square footage and same coulor, could this be the part of the problem we are having now.
And now if the buyer and seller are not aware of this or not willing to accept off this and if the agents are not informing of this, as this might contradict them selves? Besides the other factor, lack of fund, supply and demand and one should not forget, Desire.
Coming from Britain, where average homes are either flats (apartments) or semi-detached, made of bricks it does not take lot of intelligence to workout prices from the comparables over period and from location by location.
But most good agents will have good idea what it cost to build, cost of repairs if it required in order to advise the client and come up with the realistic guide price to put on the market and the estate agents get paid mostly 1% commission.
So you see I have difficulty in understanding , by cutting the price up to 10%, is going to help, who? I think one should get real, and get real professional agent who knows off the actual property in question or at least investigates individual property when it comes to selling and buying properties, and cut the chains, especially if they are relating and borrowing pages, from auto dealers.
Regards AP.
Skyline international properties
Director of international properties.
Submitted by ambrish patel on October 8, 2008 - 10:05am.
After reviewing what is said so far, we all know the saying what goes round comes round, when the market was so called so good due to supply and demand.
And at time my fellow professional colleagues, recently licensed and recruited were listing and selling home, which most of them belonged to either their relatives or friends, at the price? As to what the next door homes went for, that is to say, a million dollar home made of top quality materials, worth every penny, what it cost to build and now there this is this broken down-neglected home next door, sold for the same price, just because, it was same square footage and same coulor, could this be the part of the problem we are having now.
And now if the buyer and seller are not aware of this or not willing to accept off this and if the agents are not informing of this, as this might contradict them selves? Besides the other factor, lack of fund, supply and demand and one should not forget, Desire.
Coming from Britain, where average homes are either flats (apartments) or semi-detached, made of bricks it does not take lot of intelligence to workout prices from the comparables over period and from location by location.
But most good agents will have good idea what it cost to build, cost of repairs if it required in order to advise the client and come up with the realistic guide price to put on the market and the estate agents get paid mostly 1% commission.
So you see I have difficulty in understanding , by cutting the price up to 10%, is going to help, who? I think one should get real, and get real professional agent who knows off the actual property in question or at least investigates individual property when it comes to selling and buying properties, and cut the chains, especially if they are relating and borrowing pages, from auto dealers.
Regards AP.
Skyline international properties
Director of international properties.
Submitted by Jeffrey Esterkes on October 8, 2008 - 1:06pm.
Dear Mr. Gillespie, I have read Coldwell Banker's press release concerning your upcoming sales event with interest. Though I applaud any initiative that offers buyers and sellers common ground toward consummating a transaction, I respectfully submit that alternatives to heavily discounting properties exist. If agents were to engage mortgage professionals when taking a listing, marketing a property and during the negotiation phase, as opposed to waiting until after buyer and seller come to agreement, discounts to asking prices could be minimized. The mortgage mechanics to do so are simple to construct and illustrate and are in the best interests of 1) the market because the property is not so heavily discounted; 2) the agent because the sales commission is higher; 3) the seller because the sales price is higher; 4) the buyer because the end mortgage product is more economic in the present and for the future. If you or a member of your staff would like to discuss, please do not hesitate to contact me.
Respectfully,
Jeffrey R. Esterkes
Leader Bank, N.A.
Burlington, MA 01803
888-281-8459
Submitted by Rich Johnson on October 11, 2008 - 5:40pm.
Sounds like a good way to sell stale bread but not much of a method to market homes.
Rich Johnson
360-319-3267
http://www.johnsonteamrealestate.com
http://www.johnsonteamrealestate.com/blog/
Submitted by David Auston on October 13, 2008 - 8:48am.
Sounds like a proactive approach to advertise homes for sale, which I commend, but I agree with the above. Buying a home is nothing like buying car(or stale bread as stated above).
Naples Fl Homes For Sale
Mediterra Naples
Naples Fl Luxury Golf Homes
Submitted by Joseph Hastings on October 13, 2008 - 2:23pm.
Price, Price, Price. This should be a mantra that goes hand in hand with Location, Location...uh, you get the idea.
One of the above comments suggested and I believe rightly so that new Agents, seasoned Agents/Assoc. Brokers price the Home/Condo/Co-op competitively from the jump. CMA's are hardly an exacting science and we all need to be aware of our respective markets and statistical sales data. The MLS is a storehouse for comps and hopefully we as licensed professionals know of other sources that we can glean enough information to put forth a correct and factual CMA.
We are all aware that there will always be another Agent who "buys a listing" and will go with the sellers ridiculous suggested list price simply because they may not have enough training/experience or even the willingness to walk away from what they know deep down is overpriced and will never bring in enough qualified customers.
Cutting 10% across the board seems to me excessive and I don't know any Agent that wants to throw away a clients equity. That approach is never good for referrals. I can't see this as a company directive for every market CB is in but it's their call. Hopefully it will yield positive results. It just seems like they are treating dandruff by decapitation.
Submitted by Harry Pokorny on October 16, 2008 - 12:33pm.
I agree with you all, I do not see this being a very beneficial plan for anyone.
Austin Real Estate Texas
Submitted by (Fort Worth Real Estate Guy) on October 19, 2008 - 4:15pm.
I think this is a smart move. If they do it right they will sell allot of homes in that 10 days.
Mike Pannell
Nu Home Source Realty LLC
817-509-1400
http://www.nuhomesource.com
http://www.fortworth-texas-real-estate.com
http://www.dallas-county-texas-real-estate.com
Submitted by Joe Cline on October 19, 2008 - 9:21pm.
I used to work for Coldwell Banker. They are pretty good with their marketing ideas. I think this will be good for them. For example, the national open house was a huge draw last year when I did it with them.
Joe
Round Rock Texas Real Estate
Buttercup Creek Homes in Cedar Park
Austin Real Estate Blog