When Your Realtor Suggests a High Selling Price, Beware!

I may step on a few local agents toes with this post, but this is of utmost importance for sellers in this type of market...

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 a few local agents. Each Realtor comes prepared with a "Competitive Market Analysis" and they each recommend a sales price.

One of the Realtors has come up with a price that is lower than you expected and you are dissapointed. Although they back up their recommendations with recent sales and current market data, you remain convinced your house is worth more.

When you interview the next agent, they are much more in line with your own hoped-for value, or maybe even higher. Suddenly, you are a happy and excited home seller who is already counting the money and feel that THIS agent is a better agent.

You may have just experienced the dangerous sales practice called "Buying a Listing"

If you’re like many people who don’t buy or sell a lot of homes, you pick Realtor number two. 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 really sees the value in your home.

The truth is that you may have just met an agent engaging in a questionable and all too common 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 agent 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 to where he knows it should be.

Why do some agents "buy" listings this way? There are 4 main reasons:

1)  the agent knows you have to sell and that they will eventually get you to reduce your asking price to where it should have been initially, even though it may be $10,000, $20,000, $50,000 or even $100,000 less then they told you they could get you on the day you signed up!

2) so that the agent can do a neighborhood mailing and maybe get another listing “priced correctly” that they believe they have a chance of selling.

3) the agent hopes to get a buyer off of your sign or ad, that buys some other house, and they eventually gets a paycheck that way.

4) the agent may really believe that the home will sell at that price because of inexperience, incompetence or lack of training.

One more very important caveat…in a declining market like we have now, this tactic may end up costing you tens of thousands of dollars as you "chase the market down"!