Looking For a Realtor? Or (Lots & Lots of) Compliments?
I heard about a prospective home Seller the other day who interviewed seven (!) Realtors to list their home (I wasn’t one of them).
To be sure, the home was a multi-million dollar estate on Lake Minnetonka, but still ” seven Realtors??
I’m sure that the Seller thinks they’re being especially meticulous, but instead they’re likely ensuring that these two things happen:
One. They list their home at a too-high price.
Surprise, surprise, Realtors are competitive, and they know that one of the biggest criteria for home Sellers choosing a Realtor is their market analysis ” specifically, their recommended listing price.
For homeowners who are especially identified with their home, a high price is a compliment (in fact, the higher the better).
Conversely, a relatively low price is an insult.
Never mind the Comp’s (“Comparable Sold Properties”) underlying the Realtors’ analysis, how well-chosen they are (or aren’t), and whether the adjustments are reasonable.
In Realtors’ parlance, landing a listing by quoting a too-rosy list price is called “buying the listing.”
Two. The overpriced home sits on the market. And sits, and sits, and sits.
Suddenly (or not), the home’s been for sale for six months ” or two years(!) ” and Buyers’ mindset shifts from “what a great house; I’d better jump before someone else does” to “I wonder what’s wrong with it??”
Eventually, owners who are serious about selling typically have to reduce the price not just to where it should have been initially, but well below to re-attract skeptical Buyers.
Realtor Self-Selection
Of course, the other reason not to interview seven Realtors is that good ones won’t want to waste their time pursuing a listing where the odds of getting hired are so low.
Or, if the agents do participate in such a dog-and-pony show (“Realtor bake-off?”), they won’t invest much time preparing a thoughtful listing presentation, further raising the odds that the home will be mis-priced (make that, “overpriced”).
Ultimately, my take on such Sellers is that, at least on some level, they know all this ” and don’t care.
If their home takes years to sell ” or never sells at all ” it’s no big deal, because they’re not especially motivated . . .
See also, “Real Estate Sales Law #1: “Unmotivated Stagers Make Unmotivated Sellers”.”
