I read a very interesting question today, from a woman going through a divorce. She asked whether it was ok to list and price her home above a recent appraisal. She noted she wanted to stay in the home longer.I sensed the woman might need an aggressive contrarian viewpoint, and didn’t hold back with my advice, although coming from a male, perhaps I honestly have no hope of being heard.

At any rate, here’s the gist of what I said:

If someone is looking to overprice their home, there will always be a REALTOR that will gladly list the home at whatever price the seller wants to list it. I won’t list a home overpriced, as it isn’t actually free, and my time and money are best kept in my pockets available for my family, but there are always inexperienced agents that will take a listing, no matter the price. If you want to overprice your home, what you want to look for is an inexperienced agent that has never sold a home before. Someone that is desperate to have their sign hanging in front of your house.

That’s the direct answer to the question, at least. The underlying question is: I’m really mad at my future ex-husband, and can I take it out on him by overpricing the home? Legally, you might be able to. I suppose it depends on the lawyers and judge that’s involved. Morally, that’s a personal decision.

But let’s look at it financially: There’s a good probability that an over-priced home, coupled with an angry seller, will lead to a stigmatized property, such that when you do decide you really do want to sell it, you may have a hard time getting a fair and reasonable offer. I’ll explain why:

During the time your home was listed too high, experienced agents, that have buyers looking for homes like yours, will know it is listed too high, and will do 1 of 2 things: 1) not show your home at all. 2) show your home, and make a reasonable offer that you reject, thereby really, really irritating the buyer’s agent.

If you do #2 just one time, word will likely spread, and getting a second offer will suddenly be very, very difficult.

#1 is what I typically do. I tell my clients if that’s they home they want, lets wait until the price becomes reasonable in 3 or 6 months. But here’s the other thing I do. Once the price does become reasonable, I encourage my clients to make a lower than market price offer, and we hold to that. I figure if the seller was being stubborn this long, my buyer’s should now be stubborn. If the seller doesn’t agree, invariably, the house will probably continue to languish, forcing the price even lower, until the asking price is actually lower than the price my clients offered.

Think I’m kidding? I’ve been involved in exactly this scenario. Divorced couple, mad at each other, can’t agree to sell, still living on separate sides of the house, with a current list price now 6 months later that is lower than the price my client offered.

Ultimately, their anger at each other has resulted in a significant financial loss for both of them. Assuming the proceeds from the house are split 50/50, this particular house has already cost each party $50,000. Our actions have consequences.

So back to the original question, what I’d recommend an angry person going through a divorce do, is decide just how angry they are, and how much money that anger is worth. In today’s real estate market, playing games with housing prices is a very slippery slope.

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