Telling Sellers What They Want to Hear — At First
While my track record landing listings is very good — it’s not perfect.
The most common reason prospective Sellers choose another Realtor?
The other Realtor took the listing at a higher, unrealistic price — a practice that Realtors call “buying the listing.”
Last June, I interviewed to list a Lake Calhoun home that I projected selling in the low-to-mid $900’s, and recommended a listing price of $1 million, plus or minus.
A couple days later, I received a polite call from the Sellers that they were “going with another Realtor.”
Sure enough, the home debuted on MLS a few weeks later . . . for $1.3 million!
Barely six weeks later, the owner dropped the price a whopping $200k.
Six months after that, the home ultimately sold for $900k, a hefty 31% below original ask (the Twin Cities market average is 8% – 10% off).
Telltale Signs; or, Seller Beware
How can you tell if an agent is buying the listing?
The two most obvious signs: 1) their recommended list price is much higher than what the Comp’s — and any other agents — suggest; and 2) the agent wants an unusually long listing term, e.g., one year or more (if you’re going to overprice a home, you’d better be prepared to wait).
Why should home Sellers beware of such a Realtor? (besides the *dubious ethics, that is.)
Because it hurts their bottom line.
Selling price correlates inversely with market time.
A home that debuts on the market signficantly overpriced will typically take longer to sell, and ultimately have to be discounted below market value to (re)attract skeptical Buyers.
*In my experience, there’s no such thing as just one ethical lapse (sort of like cockroaches that way).