Fort Worth Real Estate Online

head_left_image

Who Should the Seller Choose ? The Agent Who "Buys" the Listing, or The Agent Who Tells the Truth ?

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 than these agents tell them it is.

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.

Comment balloon 16 commentsKaren Anne Stone • July 26 2008 11:02PM

Comments

Another great point, Karen Anne.  I think you should choose the one you really feel you can trust, not the one who just tells you what you want to hear.  You need an honest realtor, who will tell you the fair market value of your home if you want to sell, not just stroke your ego. 

Posted by Chris Fisher (Your Virtual Assistant) almost 11 years ago

As a listing agent with one of the three appointments and an HONEST price evaluation, it is my duty to inform the couple of the fact that other agents may try to "buy the listing".  If your comps hold up and you can show them on paper, and they choose NOT to list with me, that is OK with me!  I will then hope to find the first BUYER for that home and bring them a REAL offer!  I don't have time or money to have listings languishing out in "neverland".  If the sellers are'nt realistic I tell them good luck and move on!  --Greg

Posted by Greg Evans (Coldwell Banker Gundaker) almost 11 years ago

As a strong listing agent I tell them the truth according to the statistics and I let them know there will be agents who will tell them what they want to hear to get their listing.  I am not there to make friends but to provide them with education and information in order to make an informed decision about the largest investment they will make in their life.  Reality vs Fantisyland! 

Karen Anne....once again another great post.  You are definately a creative and critical thinker!  <:)

Posted by Pam Winterbauer, "Providing Blue Ribbon Service" (Pam Winterbauer Real Estate) almost 11 years ago

Chris:  Usually, if a seller is acting from their strength, instead of from a panic state, they will recognize who they can trust... and choose them.  Choosing a listing agent who "buys the listing" is usually a one-way-ticket to having your home one the market for a very long time.  Thanks for sharing.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 11 years ago

Pam:  Yes... if they want to go to Fantasyland... just point them and their car going south to Disneyland.  Bless your heart for your kind comments... I really appreciate them.  Your continued praise on my behalf just shows what a great judge of character you are... LOL.  Thanks again... take care... and huggs to Sweetie.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 11 years ago

Greg:  I think part of a good listing agent's presentation should involve telling the seller all about "buying the listing."  It is so cool when I do that during a presentation, and then get a call back from the seller after the agent that followed me ends up doing that very thing in his listing presentation.  It actually makes me look like I know what I'm doing.  What a concept !  Yes... overpriced listings... walking away from them is usually the best choice.  Thanks for sharing.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 11 years ago

Karen Anne,

As usual you have made an excellent point.

In our market I have noticed that there are some agents that are so hungry that they will promise the moon and can only deliver a dark night.

We are not responsible for the market, but it is our duty as professionals to work within this market.  And sometimes the truth just hurts.  Plain and simple.

To offer false hope is bad business practice IMO.  Why would a professional want to set their client up for failure?  Makes no sense.

Posted by Carol Smith (Casmi Photography) almost 11 years ago

Hi Karen Anne... you always have such interesting and thought provoking insight into these scenarios!  No doubt, as an agent, I am going to say that the sellers should list with an agent who tells them the truth about the market and their home's value in it, but I think all of us have lost a listing to another agent who "buys" the listing only to eventually take a series of price reductions to get it to sell... often for less than what they might have received if they had priced it properly to start with.  I just blogged about "stale listings" and "chasing the market" yesterday if you are interested in commenting. ;)

Posted by Steve Shatsky almost 11 years ago

Karen Anne, I like the way you explained this practice.  It is such a disservice to the seller to not lay out the truth of the market and be realistic in pricing a listing.  It is painful to watch an overpriced home sit and sit, until desperation time sets in on the sellers.  We are hired for our market expertise and owe our clients our best knowledge.  Hopefully, they will listen.

Posted by Elaine Hanson, REALTOR - Topanga, CA Real Estate Agent (Compass) almost 11 years ago

Karen Anne - In a hot market I can understand why an agent might want to buy a listing, but in today's market, who would want all the expenses associated with a listing unless the home was going to sell.  There are so many overpriced listings that expire. 

It's a business decision on my part not to take on an overpriced home, but there's also an ethical issue when a REALTOR takes on an overpriced home because the agent hasn't been honest with their client. 

Posted by Gail Robinson, CRS, GRI, e-PRO Fairfield County, CT (William Raveis Real Estate) almost 11 years ago

Karen Anne...

This is a battle we as Realtors have fought for years and will continue to...I think it just boils down to greed.  People want to hear what they want to hear and not the truth.  If the agent would stop and think about how much is cost them to carry an unsaleable listing they would not take them.  In this market well in any market, I just can't understand why an agent would knowingly tell the seller an unrealistic price.

One of the things I've told sellers is "You should charge them rent for their sign being in your yard.  The only reason it's there is to get buyers, since your house will not sell for that price.  Would you rather me tell you the truth or just want you want to hear?".

Hope to see a entry from you on our contest.  L

 

Posted by Liz Carter, Broker/Owner of Liz Carter & Team Realty, Katy TX (Houston) (Liz Carter & Team Realty-Your Real Estate Resource For Life!) almost 11 years ago

Hi Karen Anne,

List to sell or list to sit....I prefer the truth if I get the listings great if not it wasn't meant to be. :)

Posted by Suzanne Sands, Somerset MA Real Estate (Pavao Real Estate) almost 11 years ago

The truth will set you free ... always.

Posted by Jesse Barron, REALTOR® - Real Estate Made Easy™ in Anne Arundel County, MD (Keats & Co. Real Estate, LLC) almost 11 years ago

I've lost listings because of this practice.  Simply put, I always tell my potential listing clients that they should find the agent who is best able to market their property.

Posted by Jon Miller (United Country-Marshland Realty) almost 11 years ago

I just wish sellers would realize that they should hire the agent who can offer the most exposure for their product.  The seller is always in charge of price and that should be the last reason they hire anyone.

Posted by Sandra Carlisle (Ayers), Real Estate Marketing & Sales (Berkshire Hathaway California Properties) almost 11 years ago

It all depends on the clients and not the agents. Why do agents always make it about "them" and not the clients.  If the clients want the home they need to be prepared to buy it. End of story.

Posted by Tracy Santrock, Raleigh - Cary Realtor/Broker In Charge (Fonville Morisey/Santrock Realty Group, Inc. ) almost 11 years ago

Participate