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.”

Exhibit A

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).

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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