“The check is in the mail” is one of the great lies of all time. Another is, “I’m from the government and I’m here to help you.” Real estate has its own set of lies, especially among agents who want to list your house for sale.
One is, “I can get you a higher price than anyone else.” Another: “I have a pool of buyers in my hip pocket who want to buy your house right now.”
These and other deceitful statements were laid bare recently in a post on the Inman real estate news service by Carl Medford of Benchmark Properties, a Keller Williams agency in Fremont, California.
“There are many more lies out there,” he says, “but these are the most common ones I encounter regularly.”
Let’s dive into them.
▪ Higher price. Medford says this tactic, also known as “buying a listing,” is complete hooey. Many agents promise to land sellers a high price — higher than any other agent can bring — just to obtain the listing. But this is usually just false hope.
A few weeks later, when the property hasn’t drawn much, if any, attention from buyers, the agent will say the price has to be lowered. But lowering a price often stains a listing: It tells savvy buyers and their agents that you need to sell, and that you might even go lower.
The better way is to price the house realistically in the first place. In a hot market, if your house is any good, buyers will flock to it — and probably bid up the price anyway.
“The truth is, buyers are the ones who actually determine prices, not sellers or their agents,” Medford says.
So ask the agents you’re considering to prepare a comprehensive market analysis that shows what similar houses in your area sold for and what others are currently listed at. You can price your place at the top of that range if it is sure to sell, or shoot for the middle if your house is just so-so. Then, after you find an agent you like, reevaluate the market just before your listing goes live and price it accordingly.
▪ Pool of buyers. Agents telling sellers they have a pocketful of buyers just itching to buy your house is another common tactic that has been used through the years. But it does not serve your interests. Even if this promise were true — and it’s probably not — it’s better to offer your house to the entire homebuying universe by entering it into the local multiple listing service.
Says Medford: “You will usually get the best offers by going live on the market and letting everyone out there compete for your home, not just one buyer whom the listing agent controls.”
He also makes another important point: If the agent does, indeed, have a buyer lined up, then he or she will be representing both of you. But it’s almost impossible to give both sides an even shake. Better to have an agent who represents your interests and yours alone.
▪ Better access. Similarly, listing agents like to brag that because they belong to a regional or national chain, they have great access to buyers. But the chances that your eventual buyer comes from that network are slim.
Besides, it’s not really an advantage. According to the latest National Association of Realtors report, more than 9 out of 10 recent buyers used the internet to search for homes. For almost half, this was the first step.
In contrast, contacting an agent was the first step for only 19% of buyers. The typical web search entry is something like “houses for sale in (the desired area)” — not “houses listed on (a particular realty chain’s website).”
Most franchises do allow visitors to their sites to search for listings anywhere they have offices, but whether buyers use their sites or the MLS, it’s likely they will see everything out there.
▪ No. 1. Some agents like to boast that they are the top-selling agent in their market. And it’s not a bad idea to list with a top seller: He or she is likely getting the job done for clients. But it’s worth asking: top-selling, according to who? Are they the No. 1 agent at their office? In the neighborhood? In the metro area, the state, the country?
Document their claims and check out the references. Try to determine how close their homes’ eventual selling prices are to their original listing prices. Does the agent consistently land deals for more than the listing price? Or are they always under — and if so, by how much? Past performance will help measure the agent’s negotiating ability.
▪ “I’ll buy your house.” An agent’s promise to buy your house if it doesn’t sell isn’t necessarily a fib, per se. Many realty brokerages will do that. But the question is, at what price? Is the pledge in writing? And once that price is set, do they actually live up to their part of the bargain?
Here, ask the agent for references and ask those sellers the above questions. Also ask if the agent nickel-and-dimed them for repairs that were never mentioned when the house was first listed.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at [email protected].