It’s not hard to find brokers in this market who believe that sellers who dig in and refuse to lower their listing prices are doing themselves a disservice because their homes will languish.
So why are brokers still taking on listings that are sure to linger for months and collect dust on a shelf? While the listing at hand might not sell right away, brokers say representing the properties, even when they are priced too high, can help them scoop up valuable buy-side clients.
Some brokers say that when apartment hunters — especially those who are browsing for properties that they can’t necessarily afford — flock to open houses, they can often be redirected to properties that are more amenable to their budgets. And with sales activity off by half across much of New York because of the downturn, there are more idle brokers than at any time in recent memory and more opportunities on the buying side than on the selling side, brokers say.
“Slower brokers and younger brokers have nothing to lose by taking on a listing that might be unrealistic for today’s market,” said Noah Rosenblatt, a broker who runs UrbanDigs, a blog that focuses on the economics of the real estate market.
“They might potentially pick up some side leads, some people that they can eventually work with,” he said, adding that he doesn’t use the tactic himself.
The tactic of taking on listings that are doubtful to sell at the asking price is particularly pronounced in locations where sales are marketed chiefly through newspaper advertisements, which don’t always specify the property’s price, said Delton Cheng, the owner of Century 21 Homefront, based in Marine Park, Brooklyn.
He said some curious buyers will show up for the open house to get more information, at which time brokers can quickly introduce themselves and get information about what they are looking for.
Cheng says while he doesn’t do it, he’s seen many brokers advertise without listing prices in his 16 years as a broker (the practice is legal in New York, but the exact vicinity of the property must be listed). “I’m a strong believer in that idea that one thing leads to another,” Cheng says. “And I don’t think there is anything unethical about this.”
Stockpiling listings can also help brokers attract sell-side clients, said Bradley White, a broker with Halstead Property. White said a Web site that suggests a broker is active (he says five listings is ideal), provides “a certain amount of credibility.”
White said the owner of a Tribeca co-op who’s frustrated with his current broker is considering becoming his client. He said he believes he stands a decent chance of picking up the client because of the breadth of his listings, especially because they’re in Tribeca, where many of his other posted listings are located.
White said he is confident the Tribeca co-op will sell. He said that it’s priced right and that he is not taking it on just for show, but he noted that displaying more listings is important because competing brokers do it and, as a result, pose stiff competition for sell-side clients.
Still, brokers say, the managers of their offices often frown on the pad-the-Web-site approach, because marketing each listing can be expensive.
Robby Browne, a broker with the Corcoran Group who handles many high-end listings, noted properties over a certain price, say $10 million, typically don’t hold open houses — so the benefits of taking on a big-ticket apartment just to network are limited.
Browne said he can afford to be somewhat choosy when it comes to accepting listings. If an apartment is priced more than 10 percent above what he thinks the market can support, he said he will pass on it, as was the case recently with an 8,000-square-foot Tribeca co-op, which he said he turned down twice.
In addition, he said, jamming a Web site with too many listings can create logistical headaches, as the hundreds of calls that those listings generate might overwhelm most sales teams. Browne’s own rule of thumb: only 10 listings at a time for his team, which is made up of five people. Plus, he said, while some brokers may be talented actors, they’ll have a tough time convincing the seller that they are gung-ho for the property if they don’t believe it has a chance of selling.
“If I don’t believe in it, I won’t take it because I won’t sound convincing,” Browne said.