Every listing agent has gotten the phone call from a potential seller that sounds the same. The call goes something like this:
Hi! How can I help you today?
Yes I need to sell my home and I need to get $650,000 for it. I know it's only worth $560,000 but another agent told me I could get the $650K. My neighbor said it's worth $700,000. I want to list it for $710,000 and see what happens. Can you just put it on the MLS and I pay you $500?
"I need to get $650,000 for it"
That statement from the seller to the listing agent is only 4 sentences but there is about five thousand things wrong with it. Let’s start with the first sentence. The seller “needs” to get a certain amount for their home. The fact a person needs to get an amount for their home should never have a bearing on the list price. The real estate market does not care what a seller needs to get for their home. The market should never care about something like that. The market is the only thing that determines the price of a home. The fact a seller needs an amount does not matter to the market. Now with the market calming more it has never been less of a factor in pricing a home. There was about a month in the last 10 years a seller may have been able to pull that but those times are past.
"I know it's only worth $560,000 but another agent told me I can get..."
There are two things to know about this statement. The first and most obvious is that there are some real estate agents that just have no idea what they are doing or how to properly price a listing. The other less obvious to the public is many agents do what is called “buying a listing“. There are many reasons and many ways a listing agent does this. One of the reasons an agent would buy a listing is the location of the home. If the home is on a busy street or neighborhood they are trying to farm, this is a great way for the neighbors to see their name. It is used as a free billboard placement. One thing to keep in mind the real estate agent knows the home will never sell for the price they take the listing. That is an important distinction to make. The other reason they do this is because the seller mentioned there are other agents they are interviewing and they know if they say “I will sell your home for ” they know they will win the listing. This goes back to the fact that no one but the market sets the price. The listing agent does not sell the home. They do not determine market value. That is up to the market. After the Realtor “wins” the listing they wait a couple weeks then convinces the seller to lower the price. It is unethical and terrible to do but it is done every day.
"My neighbor said..."
Your neighbor has no idea what they are talking about…..But you already know that.
"Can you put it on the MLS and I will give your $500?"
If you find a real estate agent that will do this, run, run far away. Listing only entries are not allowed and any real estate agent willing to lose their license for $500 has some deep issues. It is not allowed for an agent to give you minimum representation. There are certain things we must do. Not to mention $500 wouldn’t even cover their E&O deductible if they were to be sued. There is a lot more to selling a home than putting a couple paragraphs in the MLS.
There are plenty of other things wrong with this conversation but we touched on the main ones. Don’t just hire an agent because they gave you the highest amount your home is worth. They don’t determine the market value. Don’t forget if you do get someone to give you that much the seller still needs to go through appraisal. Make sure you find the best real estate agent even if they don’t tell you exactly what you want to hear. It is their job to tell you the truth not what it takes to scam your business.
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