"Buying a Listing"?
You decide it's
time to sell your home, so you begin by interviewing several
real estate agents. Of course the first question you ask them
is "what do you think my home will sell for?" The
agents provide you with comps and market data, but one agent
really stands out because he agrees to list your home for far
more than the others. In your exuberance and your
desire to get the most money out of the sale, you ignore the
market data and hire this agent. You have just fallen for a
common and unethical real estate practice known as "buying a
listing". This is real estate jargon for the
term we use to describe agents who offer you an inflated sales
price in order to win the listing contract.
Why would an agent want
to "buy your listing"?
First, to secure the
listing contract. This agent has beat the
competition by luring you in with an unrealistic and
dishonest price. He now has the contract. The agent knows that your home will sit on
the market, but he also knows that in time, you will become
frustrated and will agree to lower the price. At some point you'll
realize you've been "had", but it's too late -
You're now stuck in a long-term contract with this agent.
Second, to pick up buyers. The agent places a
"for sale" sign in your yard to attract phone calls.
When people call and balk at the price of your home, he will
say " I'll be glad to show you other homes in the
neighborhood that are in your price range". In effect,
the agent is using your yard as a billboard to pick up buyers
and "flip" them into other properties.
What is the down-side for
You will be obligated to
remain with this agent for the term of the contract and
will be unable to sign with anyone else
The agent community knows when an
unethical agent "buys a listing" and they may
decide to boycott your home in an effort to punish this
You will waste weeks, or possibly
months of valuable marketing time with an over-priced
listing that does not sell.
As the months drag on, your home
becomes a "stale listing". Buyers and agents get
very excited about new offerings, but they often shun old,
tired listings that have sat on the market for an extended
period of time.
In an effort to revive your listing,
you will inevitably be forced to make a number of price
adjustments. In doing so, you may be finding yourself
"chasing the market down". The market may have
declined further during the period you were over-priced,
and now your home may sell for even less that it could
have originally, had it been priced right.
can I avoid the type of agents who "buy" listings?
1) First, ask all of the agents you
interview for a CMA (comparative Market Analysis). Having current and accurate
sales comparables will help ensure that you fully understand
the true market value of your home. If any of the agent
comps seem unusually high, you may be dealing with agent who
attempts to "win" listing appointments by offering
sellers an unrealistically high selling price.
Ask each agent for three, recent sold references. Nothing
beats speaking with people who have had prior experience
with this agent.
Ask to see the agent's sales listings for the prior year (they can
easily print this out for you from the MLS). Check each
listing for the number of days on market and price
reductions. If you notice very long days on the market
or an excessive number of price reductions, you may be
dealing with an agent who over-prices their listings.
Don't fall prey to your own greed by hiring an agent
who buys your listing!
Work only with an agent who will provide
you with accurate market data and who will help you price your
home correctly. You will save a lot of time and aggravation,
and most importantly, you will give yourself the best chance
of getting your home sold for the highest amount possible and
in the least amount of time!
Copyright 2008 - Ron Denhaan,