Mr and Ms Home Seller have decided to sell their home. They have a fairly good idea of what they think their home is worth. After doing their own homework online with some of the automated pricing web sites, The Sellers, being very sensible sellers, schedule appointments with three local Listing Agents who've been hanging stuff on their front doorknob for years.
Each Agent comes prepared with a "Competitive Market Analysis" (called a CMA). It is on fancy paper, and two of the three even have "professionally done" flip charts as part of their presentations. Each of the three Listing Agents recommends a specific sales price.
Amazingly, a couple of the Listing Agents have come up with prices that are lower than the Sellers expected. Although they back up their recommendations with recent sales data of comparable homes, The Sellers remain convinced their house is worth more.
When the third Listing Agent arrives, The Sellers find his pricing numbers are much more in line with the Listing Price they had hoped for, or maybe even higher. Suddenly, they are two very happy and very excited home sellers, already counting their money.
Which Listing Agent Should The Sellers Choose ?
If they're like many people, they pick Listing Agent Number Three. They feel that this is an agent who seems willing to listen to their input and work with them. This is an agent who cares about putting the most money in the Seller's pockets. This is an agent who is willing to start out at The Seller's price, and if they need to drop their price later, they can do that easily, right ? After all, everyone else does it.
The truth is... that The Sellers may have just met a Listing Agent using an unfair listing practice called "buying a listing." He "bought" the listing by suggesting that The Sellers might be able to get a much higher sales price than the other agents CMA's recommended. Most likely, he is quite doubtful that their home will actually sell at that price. The intention from the beginning is to eventually talk The Sellers into lowering their price.
Why do some Listing Agents "buy" listings ?
There are basically two reasons. A well-meaning and hard working agent can feel pressure from homeowners who have an inflated idea of their home's value. On the other hand, there are some agents who engage in this unfair sales practice routinely.
Which makes more sense ? Which Listing Agent should the Sellers choose ?
It depends on whether The Sellers just want "to list" their home... or if they really want "to sell" their home.
Couldn't have said it better myself, Karen Anne. You hit the nail on the head! Here is a quote directly from an email that I sent a seller yesterday:
"I realize that there are real estate agents out there that will tell you that they can get your house sold for a really high amount, just to get your listing. I would rather be up-front and honest and get your house sold in a reasonable amount of time than let it sit and have you get frustrated."
They appreciate my honesty and hard work and want to list with me.
As usual, right on point, Karen Anne. And even as the market is cooling down, Sellers still expect to make a killing. The agents who take listings at inflated prices are hurting both the Sellers and the Realtors.
Karen in our business plan we target expired listings. Sometimes they were priced too high and we adjust when we list them. Often the price is fine but I see very poor marketing for the home. Agents that buy listings get lucky from time to time but we see their name over & over on MLS expired sheets.
my humble 2 cents
Brian: Along with my comment to Adam above, in the same vein, it may be the Listing Agent who has that critical need... a need to get a listing... that is part of the problem. Thanks for your comment.
Hi Susie: Yes, "need" does not determine value. When my sellers start to go into telling me how they need to get a certain price for some unconnected reason, I often tell the story about my Great Aunt Brenda, who needed to sell her home for $50,000 over what it was worth so she could buy a new Corvette.
I had the unpleasant task of telling her it wasn't going to happen, and that she needed to invest in a skateboard. LOL Thanks for your comment. Hope to see you in November.