Beware of selling agents “buying” your listing2016-10-312016-11-02https://www.housesearchaustralia.com.au/wp-content/uploads/2018/11/hsa-logo.pngHouse Search Australiahttps://www.housesearchaustralia.com.au/wp-content/uploads/2016/10/Telling-White-Lies-and-Half-2.jpg200px200px
In our line of work, we come across lots of vendors who are aiming to sell, or have their property on the market. What is frustrating for us, however, are the stories we hear from those who’ve engaged an agent who practically promises them an inflated price, only to have them not deliver and later “condition” the vendor down to accept a more realistic price some weeks later, or not sell for the price they were touting. It’s known in the industry as “buying the listing” as it’s more often than not the highest quoter who gets the listing from the vendor, not always the best selling agent for the job.
It might be tempting to think “Who cares?” but an agent’s reputation is important, especially in the communities in which they live and work. When sellers sign a listing agreement they enter into a 90- to 120-day relationship; respect for each other and cooperation is crucial. So why do agents sabotage themselves by buying listings?
1. To secure the listing and beat the competition
A seller who chooses an agent based on which market estimate is highest is the ultimate loser, yet almost every seller operates in this manner. It’s a shame because so few agents take the time to educate sellers that other factors such as marketing plans and the agent’s negotiation abilities are far more important than just value estimation. The comparable sales speak loudly enough if sellers are honest with themselves and ultimately, the market place establishes value. I’ve always advocated selecting an agent firstly on their ability to sell their services (and local reputation and experience) and THEN reading their price estimation.
2. The seller has unreasonable price expectations but it’s all advertising for the agency
Though this still doesn’t excuse the agent from taking on an overpriced listing (Agent rationale: “I know it’s not realistic, but I would have lost the listing to somebody else if I didn’t agree to the vendor’s inflated price”) it’s important to be aware that every “For Sale” sign and listing advertises the agency’s company and agent and exposure counts in this industry. Keep in mind, too, that selling agents use listings to locate and secure not only buyers but future vendors, adding to their database and generating leads. Don’t let your property linger too long with one agency- if you’re not getting results then either face the facts that your home may not as worth as much as you’ve been led to believe, or get other agent’s opinions.
3. Reliance on conditioning the vendor down on price
Even if an agent knows they are taking an overpriced listing, they may rely on the fact that when the home doesn’t sell within a typical period for the area, they can persuade the seller to lower the price. Studies consistently show, however, that interest in a home usually wanes after a set number of weeks, so there are fewer buyers for that home even when a price drop is initiated. Buyers tend to view stale listings as defective in some way and price reductions can be detrimental. They hurt the seller, and they often make a buyer wonder how much lower the price could drop.
Choosing your agent based on honesty, ethics, experience, competence and marketing can ultimately make the difference between a successful campaign and a total failure. Even in a hot market like Sydney, sellers need to choose wisely, obtain a minimum of three appraisals when selecting a selling agent, and consider all factors in the skill set of the agent, not just their quoted price.
Lastly, take a step back and get someone else (family member or trusted friend) to actually consider the most likely comparable sales to your property and provide their take on price. It’s hard not to remain objective when it comes to pricing your own home but you don’t want to fall victim to a marketplace that speaks the truth for you, along with an agent who only tells you what you want to hear.