Life...Fun and Kentucky Real Estate

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Is It Good Business For A REALTOR To Turn Down A Listing?

old houseWhy would a REALTOR turn down listing your home?

Maybe, It's Nothing Personal...Just Good Business.

A few days ago, I was asked by another REALTOR to take a look at a property out of his MLS area to see if I might be interested in listing it as a referral.

The property was actually a county outside my usual area but, if it were marketable I would be interested.

You never know till you go look and see what is around it.

There are some areas surrounding Lexington and Richmond KY that just take extra time to sell. Even in good times they just take a long time to sell.

I toured the property, but decided it would just not be the right fit for my stable of listings.

 

(The house picture in my post is not the subject property...just an example)

Factors influencing my decision:

  • Too far away (in another county I'm not famular with...never sold a property there).
  • The property backed up to a landfill(the tenant said the smell in the winter was pretty strong, not too many people would buy a farm next to a landfill).
  • My car would not make it up the steep gravel driveway (we drove up in a front-wheel drive truck and it had trouble getting up the hill).
  • House in dire need of repair and not freshly staged (Too many cosmetic repairs needed. A home inspector would find mountains of things to kill a deal with this one).
  • Temporary fencing for horses on 15 acres (fencing a farm is expensive for a new owner).
  • My cell phone wouldn't work there out in the country (what if I had an emergency?).

I thought it over carefully while I toured it. Since it would be a referral, if I sold it, I have to pay a referral fee to the referring REALTOR. This takes a bite out of my commission if it sells and we make it to closing.

This listing might take years to sell and eat up advertising and gas money. I decided it just might drain my budget right now. We are in a strange economic time.

Now, it's not unusual for me to turn down a listing. It's just the market we are in.

REALTORS work on a commission basis. If we can't sell your home we don't make any money. It's that simple.

To list a home takes advertising money, gas and time. Maybe some REALTORS have a different situation, but I pay for all my advertising. Going into winter, the budget gets tighter.

Gas is more expensive now...so I might not want to list a home that will require a lot of mileage to and from.

Time...I have plenty of that, but a REALTOR's time is just as valuable as an attorneys, doctors or anyone else that gets paid by the hour for services. I make time for what is important and my clients.

You can bet if I have to spend my money to advertise in a slow market, in winter... your house should be in tip top shape and marketable.

It needs to be squeaky clean, polished, staged, freshly painted and looking like a new penny. We have tough competition!

Buyers are walking in and walking out of listings right now. Nice houses are getting showings...but no offers. Some listings are not even getting showings! It's tough for sellers and REALTORS.

I'm all for getting a house sold fast. I have lots of ideas on how to get a home ready to sell.

There are plenty of houses selling now in Central Kentucky. All it takes is a little extra effort in getting one ready to market. 

 

 Lizette Realty Lizette Fitzpatrick

Lizette Fitzpatrick- Principal Broker at Lizette Realty.

#1 featured Kentucky Realtor on Activerain.com and Localism.com.

Publisher/Author for the only Central Kentucky email newsletter on local real estate listings and sold properties, Kentucky relocation, local events, homeowner information and fun!

For more information on Kentucky Horse Farms, Fayette County, Richmond or Lexington KY real estate click on Lizette.us.

Copyright © 2009 By Lizette Fitzpatrick, All Rights Reserved..*Is It Good Business For A REALTOR To Turn Down A Listing? *

Comment balloon 58 commentsLizette Fitzpatrick • December 27 2009 08:40PM

Comments

This is a great post Lizette, as I have done the same thing on many occasions this past year. Like you mentioned, if the seller is not on the same page then we cannot waste all the time and effort it takes these days to list a dud property.

Cheers !

Sheldon

Posted by Sheldon Neal, That British Agent Bergen County NJ (Bergen County, NJ - RE/MAX Real Estate Limited) over 8 years ago

I don't think taking that listing would have helped you.  Let somebody that works that area sell it. 

Posted by Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239, Michigan homes for sale ~ yesmyrealtor@gmail.com (Real Estate One) over 8 years ago

There are a lot of agents that take ANY listing. I agree with you about being more selective. Great post.

Posted by Ellie McIntire, Luxury service in Howard County & Catonsville (Ellicott City Clarksville Howard County Maryland Real Estate) over 8 years ago

In the last two years my partner and I have turned down 8 listings for every 1 we took. 

Why? The sellers were working on 2005 and 2006 values (and therefore listing prices with agents who would rather have a listing than a sale) in the 2008 and 2009 markets.

As you pointed out, it costs Realtors time and money to market cllents' homes. Don't get paid until it sells.  Most of those homes we declined are still sitting on market...you'd think listing agents would get up the courage to point that out.

Oh well.

Good luck to you in 2010!

Posted by Michael O'Donnell, GRI, ePRO, Accessible Homes (Berkshire Hathaway Home Services Arizona Properties) over 8 years ago

Lizette, great post.  Couldn't agree more.  You must be discerning.

Posted by Craig Richardson (National Realty) over 8 years ago

Lizette - Yes, it's good business to turn down a listing, actually it's great business to do so.

I actually had a client who was shocked when I told him I turn down listings, he thought we HAD to take every listing we were offered.  Like you I spend a lot of time and money on each listing and I need to be confident that I can sell it, if not I'll pass or refer it if I can.

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) over 8 years ago

I love the phrase "stable of listings" when reading about Kentucky horse farms. It's just too expensive to market a home in poor shape. 

Posted by Andrew J. Lenza (Coldwell Banker Residential Brokerage) over 8 years ago

Like you, I have my limits too.  It just doesn't make sense to take a listing far from my area of expertise.  I'd much rather help the Seller find a good agent to handle the property.

Posted by Tom Boos, Providing the very best of service to Sellers and (Sine & Monaghan Realtors, Real Living) over 8 years ago

I dont think there is anything wrong with not accepting a listing. If it doesnt make sense for YOU, then why waste the clients time? Let them find someone that can specialize with the needs of the listing.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) over 8 years ago

You made the right decision. If you have any question about the your ability or willingness to sell the property, you are doing the seller a favor by not taking the listing.

Posted by Tom Bailey (Margaret Rudd & Associates Inc.) over 8 years ago

I just have one question: what price what the property going to be listed at? When you come down to it, if the price is low enough, someone might want to buy it.

Of course if you find that the location of the property is out of your market area, tell the referring agent to give it to someone else that is located within that area. It is not practical for you to be spending all that extra time travelling & money on gas on a referral listing.

Posted by Monique Ting, Your agent under the sun (INET Realty Honolulu, HI) over 8 years ago

Good decision.  If some of the variables had been different, then maybe.

Posted by Jim Hale, Eugene Oregon's Best Home Search Website (ACTIONAGENTS.NET) over 8 years ago

Like Michael and his partner, I turn down more listings than I take. It's nothing personal - just business.

Posted by Maria Morton, Kansas City Real Estate 816-560-3758 (Chartwell Kansas City Realty) over 8 years ago

I'm with you, Lizette, for all the reasons you cite! Plus taking a listing gets the seller's hopes up - just wrong when there isn't a good chance of actually selling the property.

Posted by Irene Kennedy Realtor® in Northwestern NJ (Weichert) over 8 years ago

I only take listing that I feel I can sell! Yes sometimes there are properties because of price,location, or condition that just will not sell! I have a nice building lot in a community that has high dues and high crime and right now cannot give it away!

Posted by Mark VanBuskirk, PA REALTOR Specializing in Carbon & Monroe County (Cassidon Realty ) over 8 years ago

Lizette,

In the end its a strictly business decision. I'm not sure I agree with some in the industry that believe all listings are an advertising opportunity. Some just drain money, and nothing else.

Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) over 8 years ago

In answer to your question in your title:  Yes. 

This is no different than taking an overpriced listing.  For me, it is not sound business practice.

Posted by Kris Wales, Real Estate Blog & Homes for Sale search site, Macomb County MI (Keller Williams Realty - Lakeside Market Center) over 8 years ago

Yes, of course.  Some people need to be educated about the market value of their property.  Some need to learn what it will take to get the home in saleable condition. Some properties will not be worth your time and effort, period.

this is a business, and we get paid for good business sense.

Posted by Jeanne Dufort, Madison and Lake Oconee GA (Coldwell Banker Lake Country) over 8 years ago

Lizette, you made the right decision -- if nothing else because you would not have been effective at helping this seller sell their home. If you haven't sold one in the county ever, and it is an unusual property, then it is a good idea to say no! Congrats!

Posted by Marney Kirk, Towson, Maryland Real Estate (Cummings & Co. Realtors) over 8 years ago

I'm the same way...I'd rather pass on it if it's something that wouldn't fit. I try not to waste time with them especially if my knowledge of the area isn't very good and travel can come into the picture as well. The make up of the property is important and of course pricing. I've turned down a few in my time and I'm sure it will happen again. Some newer agents might be reluctant to turn down anything just to have a listing so I'm sure you made the right judgment call.

Posted by Neal Bloom, Realtor CRS-Weston FL Real Estate (eXp Realty) over 8 years ago

Lizette, you are spot on! We are professionals running our own businesses and it is incumbent upon us to determine if the task we are taking on is likely to end successfully for both us and our clients! We complain when the public doesn't come to us first to assess their real estate needs and then, when they do, we don't tell them what they need to hear for fear they will list with someone else! 

As I have told many a new agent "I'm not in this business to make money, I'm in it to make a profit!" Choose wisely and you will succeed!

Posted by SarahGray Lamm, Realtor - 100K Hours of NC Real Estate Experience (Allen Tate Realtors Chapel Hill, NC 919-819-8199 ) over 8 years ago

Lizette - Sounds like a wise choice.  It is sound and strategic business to say "no" when it makes sense to do so.  It certainly seems like if you took this on it would be a risky endeavor.  Saying "no" is an art and sometimes the client wants you more after you do so (like dating !! LOL) .  Great post !  ~ Chris

Posted by Christopher and Stephanie Somers - Realtors - Philadelphia Real Estate (Realtor / Owner - RE/MAX Access) over 8 years ago

In a word....YES !  Spend the time and the money where it makes the most sense...for you....and there will be a realtor who finds that property makes sense for them...know what you know...do what you do and you have every right to choose what those things are ....every prosperous wish  for 2010 !

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (Keller Williams 414-525-0563) over 8 years ago

Barbara CalwhiteIf you take a listing you can not service or is over priced it won't sell.  Then the seller is mad at their agent and tells everyone they know. 

I tell sellers when I turn down a listing that taking their listing would not be doing any favors for them or me.  All that it would accomplish would be a dissatisfied seller and a lot of grief on the part of the agent.  It does pay to turn down a listing.

 

Barbara Calwhite

Posted by Barbara Calwhite, 417-438-7387 Specializing in Relocation (Keller Williams Realty of Southwest Missouri) over 8 years ago

Our businesses are defined as much by whom we choose NOT to work with as whom we choose to work with.

Posted by Brian Schulman, Lancaster County PA RealEstate Expert 717-951-5552 (Coldwell Banker Residential Brokerage, Lancaster PA) over 8 years ago

Bad business drives away good business !!! I turned down 4 listings in 2009 . None have sold yet !

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) over 8 years ago

Lizette, this is sound advice. It doesn't make any sense to take listings that you know won't sell and are a detriment to your other listings.

Posted by Betty Knowles, TeamKnowles REALTORS® - Springfield MO Real Estate (Coldwell Banker Vanguard - www.teamknowles.com) over 8 years ago

Some great reminders here. There are many reasons why it's probably not wise to take a listing - many of them you have mentioned here. For me, I feel that I am at my best when I have a product to promote that I am confident in. It's tough enough to get prime properties to closing without the distraction of less than desirable listings.

Posted by Susan Thompson-Solomons, Southern MD Real Estate-Solomons Specialist (Berkshire Hathaway Home Services McNelis Group Properties) over 8 years ago

I agree with you all however there are a lot of clients out there that will give you a less than desirable piece of property. They do this  to see if you have what it takes to sale the property in a timely fashion. And the other reason is to test you on your action of accepting less than desirable property. Building up a rep or with your client is the key to getting better and better desirable properties..


REONLS

Posted by Deron Young (REONLS) over 8 years ago

If I turn it down it is because I believe that I cannot give the service required in the listing agreement, and the state laws governing my actions as a Realtor. Plus, if you don't believe in the property, you won't do you job properly.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 8 years ago

If I turn it down it is because I believe that I cannot give the service required in the listing agreement, and the state laws governing my actions as a Realtor. Plus, if you don't believe in the property, you won't do you job properly.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 8 years ago

This is a good post to define the word "Professional" Good to see that you are one and practice as one.

Tony

Posted by Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv (REISA - 317-663-4173) over 8 years ago

The short is answer is "of course, if it's not in your line of business."  I was asked by a friend if I wanted to list his home.  Based on the situation it just didn't look like it was something I could help him with.  I made the right choice.  It never sold, he ended foreclosing after more than a year.  In the meantime I remained focused and had a banner year doing what I do best, which is serving the niche I built and fill.  Of course there are times when it's good business to turn down a listing.  You've mentioned several good ones.

Posted by Frank Castaldini, Realtor - Homes for Sale in San Francisco (Coldwell Banker ) over 8 years ago
Lizette, all great reasons to not take a listing. Ultimately OUR call for business reasons!
Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) over 8 years ago

Discretion is the better part of valor. I have turned down listings on some occasions, and I have released listings in other instances. In all cases, it was not price or difficulty in selling, it was difficulty in dealing with the (prospective) client. I can deal with hard to sell, I can deal with far or a high price. I will not deal with unstable people. 

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) over 8 years ago

Thanks for the great post! We should turn down listings and not work with buyers if they are not the right fit.

Posted by David J. Lampe, Realtor - Web Savvy Denver (Your Castle Real Estate) over 8 years ago

That property will be perfect for another agent.  Not listing it shows that you know where you are strong and what not to waste your time on.  I would have done the same thing!

Posted by Michael Larson (Lancer Group Properties) over 8 years ago

I know an agent who "refers" clients to a dumb agent whenever he gets something like that or the person wants a "discount" commission. He collects a referral fee if it ever sells and the other agent must deal with the "customer". The best part is the customers he sends to the dumb agent gets more repeat business and referral from the one he turned away. Maybe I'll be smart in 2010? Wish me luck.

Posted by Gregory Bain, For Homes on the Jersey Shore (Mezzina Real Estate & Insurance) over 8 years ago

I think it can be challenging to market a property out side of your normal area. And it sounded like it had too many issues to be saleable in today's market.

Posted by Sharon Paxson, Newport Beach Real Estate - Arbor Real Estate (Arbor Real Estate) over 8 years ago

You are a true professional when you can turn down a listing.

Posted by Trisha P Realty Group, "Holding the Keys to Your Dream Home" (Realty Executives) over 8 years ago

I have turned down listings in the past, simply for the fact they were drastically overpriced. I was very sincere with them and told them that if they didn't sell with someone who would take the listing then lets talk when it expires. It our name out there for the world to see. Buyers don't rememberr how fast you sold a home they remember how long it took or that you didn't sell it. 

Posted by Nicholas Christopher, Communication Is Key (Century 21 Rauh & Johns) over 8 years ago

This is excellent advice. Of course, it has been covered a hundred times in various blogs before, but it still is relevant information.

Posted by Aaron Vaughn | Builder | Investor, If the deal makes sense, the cash will follow. (Conifer Homes) over 8 years ago

Great post and informative for the public, one thing I noted is that you feel it would be the home inspector that will kill the deal for you, would'nt as you put it;

  • The property backed up to a landfill(the tenant said the smell in the winter was pretty strong, not too many people would buy a farm next to a landfill).
  • My car would not make it up the steep gravel driveway (we drove up in a front-wheel drive truck and it had trouble getting up the hill).
  • House in dire need of repair and not freshly staged (Too many cosmetic repairs needed. A home inspector would find mountains of things to kill a deal with this one).

Have any influence on the deal not going through, as a realtor would these items not be brought to the attention of a potential purchaser? One could see with basically three strikes against the property and no home inspector in sight yet,  the deal may be killed on its merits or lack of, this could be the house commiting suicide.

 

Posted by William DeVries (Magnum Property Inspection) over 8 years ago

I also would have passed on it. I'm in the selling business, not the listing business. If I'm not comfortable with it or feel I couldn't properly service it I would pass.

Posted by Rob D. Shepherd, Principal Broker ABR, GRI (Windermere/lane county) over 8 years ago

If it is not making you dollars it is not making sense!  Sometimes you have to let them ride and you will be better for it in the long run.

Posted by Sajy Mathew, Making your real estate dreams become a reality! (Coldwell Banker Residential Brokerage) over 8 years ago

You certainly want to pick and choose qho you work with!  headaches are no fun!

Posted by Jeff D. Clark (John J. Howard & Associates) over 8 years ago

At least you assessed the situation by going to house and looking at the scope of what you would be dealing with.  Some agents would have taken the listing and just thrown a sign up.

Posted by Bristol Restoration, When you need it done right and done right now! (Bristol Restoration, Inc 661-294-1812) over 8 years ago

I would only take a listing like the one in your article if it had a ridiculously low price so that it would sell quickly.

Posted by Bob and Debbie Gibbs (J. Rockcliff Realtors) over 8 years ago

Nothing at all wrong with passing on a listing. I think ALL good REALTORS have done it for one reason or another.

Posted by Jim Ludes, Grundy/Will County, IL REALTOR (RE/MAX Top Properties) over 8 years ago

Great post, Lizette. Like everyone else, I hate to turn down a listing in our current market but sometimes you just have to say no. All the reasons you listed were reasons why I have turned a few down in the past. That just leaves more time for you to focus on your other listings that you're more comfortable selling.

Posted by Evelyn Bruder, CRS, GRI, ABR, E-PRO (Steinborn & Associates Real Estate) over 8 years ago

Lizette, It's good business to so no to some business, or said another way you have to know when to hold them and you have to know when to hold-em. The money , time and energy wasted would be better spent elsewhere.

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) over 8 years ago

Lizette, You have to know when to say no.  Taking a bad listing is just a big step toward disappointment.  I do agree that it is an advertising opportunity but to the neighbors it is advertising that you cannot sell a property when the DOMs rack up.

Posted by Chris Walters (Edisto Realty Edisto Beach,SC DiscoverEdisto.com) over 8 years ago

There are a lot of good reasons for taking a listing, but I think that overall there are more reasons for not taking a bad one. You have mentioned many of them. But day-after-day I see agents take over priced listings, listings in areas they know nothing about, listings that are beyond their experience or range of knowledge (if you are experienced selling homes, what makes you think you can sell a large shopping center), if you live in Key West why are are you taking a listing in Pensicola over 9 hours away? This is what gives us a bad name since in many of these cases, there is no way that the listing agent can do a good or even somewhat adequate job. Especially in a market like we are in. I have done very few VA loans on mobile homes. They can be done, but they are a different creature. My license says I CAN DO THEM, but I made the choice to do a referral to an agent that did them all the time. No liability on my part, he made a nice commission, and I got a few hundred bucks for just making a phone call!

I have little respect for agents that take listings they have no business accepting. And in their hearts, they should know better. If they do not have that much common sense or high moral fiber, that is an even scarier scenario in my book. Yet I hear many hypocritically say "Oh, those people are crazy", then the next morning you see that they took the listing any way with the excuse that maybe they will get call they can redirect to another of their properties. To me that stinks and will backfire on them in the longrun. I know an agent with 20 listings on the wall and they NEVER change. I wonder why? I have very few on my wall because I PRICE THEM CORRECTLY AND SELL THEM LONG BEFORE THEY GET STALE. Turnover is more important than the number of homes you have in your inventory. Turnover means sales and money in your pocket and the pocket of your sellers.

Posted by John Elwell (CENTURY 21 Bill Nye Realty, Inc.) over 8 years ago

Lizette,

I have turned down an inspection or two because a client made me uneasy over the phone, by Email. Taking a look at your representative photo, lots of things would have to go right for that to work out for you.

Posted by Steven L. Smith, Bellingham WA Home Inspector (King of the House Home Inspection, Inc.) over 8 years ago

Hi, Lizette. I try to take only listings that are in my geographic area, that are mainly horse properties and that have a good probability of success. It is a disservice both to myself and to my existing clients to allow myself to get spread too thin, just for the sake of having more listings.

Those interested in horse properties gravitate to my website, www.trailridersrealestate.com, so I cull non horse properties simply because they would not be of interest to riders and horse owners. That creates a niche and I've learned not to get too far outside of it....literally!

Posted by Leslie Helm, Real Estate For Trail Riders (Tennessee Recreational Properties) over 8 years ago

Lizette, You made a sound business decision. This listing would have been misery to sell. If the seller is not able or willing to make a property ready to market or refuses to competitviely price a property walk away. By the time it does sell there is so much angst and frustration it really is not worth the drama. Anyway good luck and good hunting this year.

Bob

Posted by Robert C. Burkhart (Carriage Gate, Ltd.) over 8 years ago

Just makes good business sense to discern on whether you want to invest time and money into a listing.

Posted by Herb Johnson (Access Capital) almost 8 years ago

It would depend on the price for me. If the sellers are really motivated to sell it, there are plenty of investors who could work it out.

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Los Angeles CA (Barcode Properties) over 3 years ago

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