In any given real estate market there are always some properties that are just simply overpriced. The reasons these properties end up in the inventory of a real estate broker are varied. Sometimes an owner insists on listing a property at a price much higher than it can realistically sell for in spite of an broker or agent's recommendations. More often, in my opinion, properties get listed way over a realistic price because the brokers and or agents essentially "buy the listing". It's tough competing with many other brokers and agents to list a property for sale. There often is a tendency among sellers to list their property with the agent who tells them their house is worth the most money. Because of this factor, many agents will knowingly inflate the "value" they give to the sellers strictly to get the listing. They figure that even though the house won't sell right away, later, after the seller begins to get anxious to sell, they will be able to convince the seller to do a price reduction. An agent who does this is wasting months of a seller's valuable time.
Suggestion: Be aware that it can benefit a real estate company and agent to have your property listed even if they KNOW it won't sell at the listed price. Here is why: Some franchises teach brokers that "market visibility" and "market share" is extremely important. They teach the brokers that the more signs that are visible to the consumer with their name on them the more business they are going to get. There is also an internal competition for "bragging rights" between brokers in an area to have the most listings. It also benefits an agent to have his company's sign in your yard with his name rider on it. When buyers see a real estate sign they call and ask for the agent whose name appears on the sign. If that agent gives them the price on a house and it's too high, the agent still has a chance to make a commission by selling the buyers another property. Also, many offices constantly have contests running for agent production. None of the contests I have seen actually measured production as in "percentage of listings sold". Instead what they would do would be to give an agent a certain number of points for every property she or he listed and every sales contract that they got signed. Sometimes the benefits of these contests could be quite tempting, such as a trip to Hawaii or a paid seminar. Basically what these contests succeed in doing is motivating the agents to go out and list as many properties as possible.
The bottom line is many properties that are listed in most areas are priced way too high. Some may well be on the market for many years. These listings are so common that there's a slang term in the real estate industry for them. They are known as "career listings". In other words, the agent will have them listed the entire length of their real estate career. This creates a situation where the seller who prices his property right ends up paying for advertising and promotion of many properties which have no chance of selling whatsoever. The fact that these properties won't sell means that the sellers of these overpriced properties will never have to contribute a cent to all of money spent by the real estate office on the display advertising, classified advertising, TV, Internet, etc., etc. These overpriced listings mean that the person who prices fairly won't get nearly as much promotion as they would if all the brokers and agents would refuse to take any property that is priced too high. The way the real estate business is structured I doubt if we will see that happen. Suggestion: When you are interviewing different real estate brokers or agents, be very aware of what you have just learned about the tendency to take a listing at any price to get a sign on the lawn. The agent who is telling you what you want to hear about the value of your home may be doing it just to get the listing, especially if other agents quoted you lower prices. There is only one truly unbiased person, qualified to advise you with regard to the real fair market value, a seasoned, professional state certified real estate appraiser. An independent appraiser will discretely provide you with a completely unbiased estimate of the fair market value of your home or other real property.