This was a recent call I received over the weekend:
Me: Hi Joe, how’s it going?
Joe: Hi Craig, I know we talked about selling our home using you, but we’re going to go with another agent.
Me: Oh, sorry to hear that, can I ask what was the deciding factor?
Joe: Yea, he says we can get $30,000 more than what you said.
Me: Hmm, let me look at your SMA again and see if there was something I missed. (Couple of key strokes later), okay, so you said that he can sell it for $30,000 more than what I said. Okay, so he (assuming it’s a he) thinks he can sell it for the top of the range of possible prices for your size home in your neighborhood based on the last 6 months sale. We are in a growing market, but I think he is telling you something to just get you to sign. Let me send you the property that received the highest price for the neighborhood, the same rate you are asking for. Let me know when you get it and open it up.
Joe: Okay, got it, wow, this is pretty nice, I like the tile work and the kitchen and bathrooms look great, hey it even has a pool.
Me: Right, so if I had to choose between this property and yours for the same amount, which one do you think I will pick?
Joe: This one (sounding depressed now).
Me: So what this agent does is come in and get your hopes up, lists your property and lets it sit. After a month of no offers, he’ll say the market has gone down and now you have to reduce your price. This can go on for quite some time until you finally find a buyer. The problem is that number will be below what I said because your home will have sat on the market for so long. You see, I recommend a competitive price to get your home sold within the first 2 weeks. I want 40 people to go through your home in that time and try to get lots of interested buyers making offers. I don’t want you to put your life on hold for 3 to 4 months while you play catch up to the market. I’m not saying you couldn’t get that price, but I am saying the chances are pretty low compared to something more realistic.
Joe: So what do I do now…
This is such a common tactic in the listing side of this business that it drives me nuts, agents not being honest with their clients. I have a list of agents where I have found this to be the truth. Some of the questions you can ask to find out if you have a good listing agent:
- What is your sale price to list price ratio? (95% to higher is a good indicator, even 90% and above is good).
- What is your average days on market? (you want this to be less than the market average and they should know that as well).
- How are you going to market my home?
- How often should I expect to hear from you with updates?
It is a good idea to compare agents, it is a very bad idea to compare them on recommended list price, use some common sense when comparing agents on options.