When you decide to sell your home, do not fall for an agent who “buys” your listing!

 Unethical real estate agent  As an Orange County listing agent, I’m often asked to provide estimates of current market value for people who are considering the sale of their home.  While I am happy to do so, I also do so honestly by proving my clients with current market comparables (also known as, “comps”).  But being realistic sometimes means that I won’t get the listing. Frustratingly, I often find out that the listing went to an agent who promised to list the home for a much higher price! It’s sad for me to watch these listings sit idle on the market afterwards, knowing that the seller will waste months of marketing time and will be forced to make many price adjustments.  How does this happen? Let’s look at a typical scenario:

You decide to sell your home, so your first step is to interview several real estate agents. After the interviews, the winning agent happens to be the one who promised to list your home for the highest price. You are ecstatic as your  home is listed, but as the weeks go by with no offers and few showings of your home, you realize something may be wrong. Your agent phones you and once again suggests that you reduce your list price. After many weeks and several price reductions, it dawns on you that your list price is now approaching the pricing level suggested by one of the other agents you interviewed. At this point you realize that you have been had. You have contracted with an agent who “bought” your listing.

What is “buying a listing”?

 It is real estate jargon for an agent who attempts to secure a real estate home listing by promising the seller an unrealistically high sales price.  A seller’s exuberance and greed often result in awarding the listing to an agent who promises the highest price. Once locked into a months’ long contract, the seller will have no choice but to agree to the inevitable price reductions . In the mean time, weeks and months of prime marketing time have been wasted.  

Why would an agent “buy” a listing?

1) Obviously, to lock down the listing contract and beat the competing agents.  Once the contract has been secured, the agent can then work the seller into agreeing to a series of stair-step price reductions so that home will eventually sell. In doing so, this agent will eventually get the sales commission (instead of his/her more ethical competitors).

2) Second, with a “for sale” sign on the lawn, the agent will get additional calls and pick up buyers who can be “flipped” into other properties (properly priced ones!)

So what’s the downside for you, the seller?

1) Wasting weeks or months of prime marketing time. Most offers occur within the first 30 days if the home is priced right, but for an over-priced home, it may sit for months without an offer, resulting in a “stale” listing.

2) A “stale” listing equals lower priced offers! As your home sits on the market with price reduction after price reduction, buyer’s agents will stigmatize your home as tired and “stale”.  As a result, they may encourage their buyers to make lower offers on the home.

3) Agents may boycott your home if they realize your agent has “bought” the listing. In a given real estate area, agents often know who the bad apples are, and they may choose to punish these agents by punishing you!

4) With many price reductions taking place over several months, you may wind up “chasing the market down”. As home prices in the area continue to decline, you may now find yourself selling for less than you could have, months ago!

How 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 accurate and current comparables will help you ensure that you understand the true market value of your home. If after viewing these comps, the agent still suggests a much higher selling price, you may be dealing with agent who wins listing appointments by offering sellers an unrealistically high selling price.

 2) Ask each agent for three references. Call these references and ask them about their 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 any price reductions. If you note 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.

 4) Last, do not fall prey to your own greed! We all want to make as much as we can from the sale of our homes, but look at the current market; not what your neighbor sold their home for two years ago. Real estate market conditions change constantly, and the best pricing gauge is a current set of market comparables for your neighborhood.

To recap, 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 more importantly, you will be able to sell your home for the highest amount possible and in the least amount of time! I will  be happy to provide you with a fee estimate of your home’s current value. Be assured that I will suggest a realistic price range that will attract buyers and get offers on the table!

To find out more about how I can help you sell your home, visit my web page here or call me for more information at (949) 290-3263.

_____________________________________________________________________________________________________________________________________________________________________________

Ron Denhaan is a Realtor in Orange County, CA.  He can be contacted at (949) 290-3263 and at ron@rondrealestate.com   Please visit his web site at: www.ronforhomes.com.

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About ronforhomes
Ron Denhaan, Real Estate agent, Orange County,CA. Specializing in first time home buyers, investors, condominiums, luxury property, lots and land, horse property, multi-unit income properties, beach area properties, vintage & historic homes, bank owned and short sale properties. Short sale and foreclosure certified. Green designation. (949) 290-3263 - www.ronforhomes.com - ron@rondrealestate.com (DRE# 01728866)

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