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.
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.
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 agent
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.
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.
2) Ask each agent for three, recent sold references. Nothing beats speaking with people who have had prior experience with this agent.
3) 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.
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, Realtor
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