 MEETING
WITH REALTORS
 So
you’ve decided to sell your home and have a fairly good idea
of what you think it is worth. Being a sensible home seller, you
schedule appointments with three local listing agents who’ve
been hanging stuff on your front doorknob for years. Each Realtor
comes prepared with a "Competitive Market Analysis" on
fancy paper and they each recommend a specific sales price.
Amazingly, a couple of the Realtors have come up with prices that
are lower than you expected. Although they back up their recommendations
with recent sales data of similar homes, you remain convinced your
house is worth more.
When you interview the third agent’s figures, they are much
more in line with your own anticipated value, or maybe even higher.
Suddenly, you are a happy and excited home seller, already counting
the money.
A Sales Practice Called "Buying a Listing":
If you’re like many people, you pick Realtor number three.
This is an agent who seems willing to listen to your input and work
with you. This is an agent that cares about putting the most money
in your pocket. This is an agent that is willing to start out at
your price and if you need to drop the price later, you can do that
easily, right?
After all, everyone else does it!
The truth is that you may have just met an agent engaging in a
questionable sales practice called "buying a listing."
He "bought" the listing by suggesting you might be able
to get a higher sales price than the other agents recommended. Most
likely, he is quite doubtful that your home will actually sell at
that price. The intention from the beginning is to eventually talk
you into lowering the price.
Why do some agents "buy" listings this way?
There are basically two reasons. A well-meaning and hard working
agent can feel pressure from a homeowner who has an inflated perception
of his home’s value. On the other hand, there are some agents
who engage in this sales practice routinely.
WHAT
HAPPENS BEHIND THE SCENES
If you start out with too high a price on your home, you may have
just added to your stress level -- and selling a home is stressful
enough. There will be a lot of "behind the scenes" action
taking place that you don’t know about.
Contrary to popular opinion, the listing agent does not usually
attempt to sell your home directly to a homebuyer. That would be
inefficient.
Listing agents market and promote your home to the hordes of other
local agents who do work with homebuyers, dramatically increasing
your personal sales force. During the first couple of weeks your
home should be a flurry of activity with buyer’s agents coming
to preview your home so they can sell it to their clients.
If the price is right.
If you and your agent have overpriced, fewer agents will preview
your home. After all, they are Realtors, and it is their job to
know local market conditions and home values. If your house is dramatically
above market, why waste time? Their time is better spent previewing
homes that are priced realistically.
DROPPING
YOUR PRICE... TOO LATE
If you start out with a high sales price, then drop it later --
your house is "old news." You will never be able to recapture
that flurry of initial activity you would have had with a realistic
price. Your house could take longer to sell.
Even if you do successfully sell at an above market price to an
uninformed buyer, your buyer will need a mortgage. The mortgage
lender requires an appraisal. If comparable sales for the last six
months and current market conditions do not support your sales price,
the house won’t appraise. Your deal falls apart. Of course,
you can always attempt to renegotiate the price, but only if the
buyer is willing to listen.
Your house could go "back on the market."
Once your home has fallen out of escrow or sits on the market awhile,
it is harder to get a good offer. Potential buyers will think you
might be getting desperate, so they will make lower offers. By overpricing
your home in the beginning, you could actually end up settling for
a lower price than you would have normally received.
REALTORS
TALK TO EACH OTHER
If you start out with a sales price that is too high, there is
a high likelihood you interviewed other agents. They didn't get
the listing, of course. They got "aced out" by someone
telling you what you wanted to hear.
If your listing agent routinely engages in "buying" listings,
he has probably aced out scores of other agents in the same way.
Being human, Realtors talk to each other. If they don’t like
your listing agent, not as many of them will be showing your home.
In short, you may have ended up with an agent who was good at selling
you, but not good at selling your house. And you’re going
to pay them a commission for it.
It is human nature for you to want the highest price for your home.
However, when you choose the agent who promises what you want to
hear, it often leads to stress and frustration. Most of the time,
it will take you longer to sell your home. Possibly, you will end
up selling at a lower price instead.
Or maybe as a result of reading this article, you will choose one
of the "good" Realtors in the first place. They are out
there, you know.
All articles © 2000 RealEstate ABC
No articles may be reprinted or displayed without permission.
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