5 Tricks Agents Use To Get Your Listing And How to Avoid Them
It’s a seller’s market which simply means we have more buyers than sellers. It also means we have a lot more agents competing to list your home.
I’ll give you a little insight to the tricks of the trade some agents will use to get you to list your home with them.
Trick #1: Buying the listing – Obviously every homeowner wants to get the most money out of their home as possible and every agent knows that. Agents also know that the seller will often choose the agent who tells them their home is worth the most money. This is the most common tactic an agent will use to list your home.
The truth is that no one knows what your home is worth until you put it on the market. We have a good idea of the range, but that’s it. (Read: I Don’t Know What Your Home is Worth and Neither Does Any Other Agent)
When I meet with the homeowner, most of the time they have a pretty good idea of what their home is worth. Be wary of the agent who tells you your home is worth a lot more than you were expecting.
Solution – Have them show you the comps that support the price they are suggesting. Ask them to provide data showing their list price to sales price ratio. Ask them how long they typically wait for the first price reduction. Just by asking these questions, you’ll get a sense as to if they are being honest, or if they are just trying to get you to list with them knowing full well they will ask you to drop the price in a couple weeks.
Trick #2: Under bidding the listing – The opposite is also true. Some agents will provide a very polished presentation with charts and stats about their success in pricing homes correctly. They’ll then use that info to talk you into listing at a below market price suggesting that you will get multiple offers and a bidding war. Be very careful. Expecting multiple offers is a gamble for the seller, but usually ensures a quick sale for the the agent.
This is a very common tactic of the discount broker since they need their listings to sell fast in order to make any money.
This tactic is usually coupled with a high pressure close. There are real estate trainers out there who are very skilled at teaching agents how to lead you down the road to signing the contract immediately at the price they want using hard sell and diversion tactics (think: used car salesman).
Solution – Trust your gut. If you feel like you’re being led down a road where the only answer is “yes”, cut it off. You don’t need to sign right then and there no matter what closing tactic they may use on you. If you wake up the next day and decide you would like to work with this agent, I’m sure they’d be happy to take your call.
Trick #3: Telling you they have a buyer – This tactic is actually quite effective so beware! During the appointment, the agent will mention that they have a buyer for your home and would like to show it to them asap before you put it on the market. They do this for two reasons, #1) To make it look like they are really dialed into your neighborhood and already have the buyers. #2) It sets up another meeting with you with the hopes you’ll be able to “bond” and you’ll feel obligated to list your home with them.
Solution – Ask them some details about the buyer: How long have they been looking? Do they have a home to sell first? Where are they coming from? You can ask to see the pre-approval letter beforehand too. Again, trust your gut. You can usually tell who’s being truthful or not. And if they do actually have a buyer, but you’re not comfortable listing your home with them, I’m sure they’d be happy to sell it even if you list with another agent.
Trick #4: Cutting their commission – There’s a saying in sales – Price is an issue in the absence of value. There are agents willing to immediately cut their commission because they believe that’s the only value they bring to the table. They mistakenly shift the focus from what you’ll net to what you will pay. What’s important is getting you the best terms and the highest net proceeds. Any decent agent will provide you with an estimated net sheet to let you know approximately what you will walk with after fees.
However some homeowners will simply choose the agent offering the lowest commission thinking they are saving money, but ultimately end up netting less.
Solution – Check online reviews like Zillow, Yelp, and Google. Find out how long they’ve been in the business and how many homes they sell in a year. Ask to talk to their last couple of sellers. Review their online marketing and make sure your home will be marketed properly to net you the highest proceeds. Find out if they’re a Certified Negotiation Expert. And again, trust your gut. You’ll know who’s the right agent when you meet them.
Trick #5: Guaranteed buyout – “I’ll Sell Your Home in 60 Days or I’ll Buy It Myself”. Read the fine print. There are usually a ton of disqualifiers and they will push you to list is at a low price to sell quickly. And if they do offer to buy your house, the price they would pay is likely quite a bit less than it’s worth.
Solution – Run!