“The check is in the mail” is one of the greatest lies of all time. Another is, “I’m from the government and I’m here to help you.” Real estate has its own lies, especially among agents who want to put your house up for sale.
The first is, “I can get you a higher price than anyone else.” Another: “I have a group of buyers in my pocket who want to buy your house right now.”
These and other misleading statements were exposed recently in an article 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,” he says, “but these are the most common ones that I come across on a regular basis.”
Let’s dive in.
▪ Higher price. Medford says this tactic, also known as “buying an ad,” is completely hooey. Many agents promise land sellers a high price – higher than any other agent can afford – just to get the listing. But that’s usually just a false hope.
A few weeks later, when the property hasn’t attracted much attention from buyers, the agent will say the price needs to be lowered. But lowering a price often stains an ad: it tells savvy buyers and their agents that you need to sell, and that you might even lower.
The best way is to price the house realistically in the first place. In a hot market, if your home is good, buyers will flock to it – and likely raise the price anyway.
“The truth is that it’s the buyers who really set the prices, not the sellers or their agents,” says Medford.
So ask the agents you are considering to prepare a comprehensive market analysis that shows what similar homes in your area have sold for and what others are currently listing for. You can price your home at the top of this range if it’s sure to sell, or aim for the middle if your home is just average. Then, after finding an agent you like, reassess the market just before your listing goes live and price accordingly.
▪ Pool of buyers. Agents telling sellers they have a handful of buyers eager to buy your home is another common tactic that has been used over the years. But it does not serve your interests. Even if that promise were true—and it probably isn’t—it’s best to offer your home to the homebuying world by listing it on the local multiple listings service. .
Says Medford: “You’ll usually get the best deals by going to the market and letting everyone compete for your home, not just a buyer vetted by the listing agent.”
He also highlights another important point: if the agent does have a buyer lined up, he will represent both of you. But it’s almost impossible to give both sides an equal jolt. Better to have an agent who represents your interests and yours alone.
▪ Better access. Likewise, listing agents like to brag that because they belong to a regional or national chain, they have excellent access to buyers. But the chances that your potential buyer will come from this network are slim.
Besides, it’s not really an advantage. According to the latest report from the National Association of Realtors, more than 9 in 10 recent buyers have used the Internet to search for homes. For nearly half, it was the first step.
In contrast, contacting an agent was only the first step for 19% of buyers. The typical web search entry is something like “homes for sale in (desired area)” – not “homes listed on (a particular real estate chain’s website)”.
Most franchises allow visitors to their sites to search for listings anywhere they have offices, but whether buyers use their sites or the MLS, chances are they will see everything.
▪ #1. Some agents like to brag about being the best-selling agent in their market. And it’s not a bad idea to sign up with a top salesperson: he or she is probably doing the work for the clients. But it’s worth asking: top sellers, according to whom? Are they the #1 agent in their office? In the neighborhood? In the metropolitan area, the state, the country?
Document their complaints and check references. Try to determine how close the eventual sale prices of their homes are to their original listing prices. Does the agent consistently get offers above the listing price? Or are they still under – and if so, by how much? Past performance will measure the agent’s ability to negotiate.
▪ “I’m going to buy your house.” An agent’s promise to buy your home if it doesn’t sell isn’t necessarily a lie. Many real estate agencies will do this. But the question is, at what cost? Is the commitment written? And once that price is set, are they really keeping their end of the bargain?
Here, ask the agent for referrals and ask the above questions to these sellers. Also ask if the agent has nickel-plated them for repairs that were never mentioned when listing the house.
Lew Sichelman has been covering real estate for over 50 years. He is a regular contributor to numerous shelter magazines and housing and housing finance industry publications. Readers can contact him at email@example.com.