Home Sellers Can't Handle The Truth
by: Ines.Hegedus-Garcia on November 04, 2007 15:04:04 15 comments »
If you are in the market to sell your Miami home, how do you interview Realtors? What questions do you ask and ultimately, what’s the most important factor when choosing a Realtor?
When we asked random people what qualities are important when choosing a Miami Realtor, the response was: Ethical, Loyal, Truthful, Professional, Aggressive, and Experienced.
But when we ask home sellers how they choose their Realtor, it comes down to one single factor: PRICE.
Here are different scenarios we wanted to present. In the 3 scenarios, sellers interview 3 well known Realtors in their area who appear in local advertising and seem to have a wide array of listings.
FIRST SCENARIO
- Agent 1 tells them the truth about the miami real estate market and how they will sell the home for a lot less than they had planned.
- Agent 2 tells them they will list the property at whatever price they think is right and will recommend reductions as time progresses.
- Agent 3 tells the buyers that they can get $200,000 more than what Agent 1 said.
What surprises us is that 9 times out of 10, the sellers will choose agent number 3 – even if that agent is not being realistic, even if that agent will NEVER achieve their goal. The house ends up sitting on the market for months, it may have a couple of contracts that fall apart because the house simply will not appraise, and the house will end up selling bellow Agent 1’s price.
We have seen this happen so many times that we just roll our eyes and cannot believe that people can be that naïve. We realize that being ethical and truthful is not important to a lot of sellers.
SECOND SCENARIO
- Agent 1 tells them that they should offer a higher commission to cooperating agents to have more exposure and a better chance of selling.
- Agent 2 says commission makes no difference and they should list at the standard.
- Agent 3 explains how they have tons of buyers, they only show their own listings and if they sell the property themselves, they will give a major discount on the commission.
Again, 9 out of 10 times, sellers will choose Agent 3. What they don’t realize is that because agent 3 only pushes their listings, other agents are not interested in showing Agent 3’s listings. Because Agent 3 is committed to making both sides of the deal, he is representing neither the seller’s nor the buyer’s best interest, but is only interested in the mighty dollar and volume sales. Those sellers will reduce the chances of selling their house in a buyer’s market, because they are limiting their market.
Because PRICE is once again at the top of the “qualifications list”, sellers fail to see the negative aspect of listing with Agent 3.
THIRD SCENARIO
- Agent 1 explains that over 85% of buyers start their search in the Internet and it is important to Google the Realtor’s name to see their search ranking.
- Agent 2 sees no advantage in on-line advertising because real estate is “local”.
- Agent 3 is in every local publication possible, his face appears in the local chamber of commerce, has a beautiful magazine ad, appears in the local paper and promises that the listing will appear in all those print-ads and local publications…….he has no Internet presence.
9 out of 10 times, sellers will again choose agent 3. Did you know that all those local print ads are good for getting listings? A study was done by the National Association of Realtors that local print ads and publications are recommended because they “expose” the Realtor…..not the listing…….it helps REALTORS!
Take off the blind fold!
So there you have it– a listing agent chosen because he suggests the highest price (not being truthful), he pushes his own listings to his buyers and reduces commission and on top of that produces beautiful print ads that don’t sell listings.
We are seeing buyers educating themselves on the real estate market, on advertising, on local trends. We see buyers going in depth when choosing an agent to represent their best interest, so why aren’t sellers doing the same thing?
If you are a seller, do your homework, check your options, and don’t fall in the PRICE trap. We ALL want to get the most money possible in the least amount of time (that’s a no brainer). Google the Realtor, see what their Internet Presence is like, ask particular questions on marketing your individual property. Ask about latest advertising tools like video and blogging, how many different tools do they use? Make sure your interests are well represented.
You want the truth?....you can't handle the truth!
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· http://charlottecommunitiesonline.comWhat a great post, my favorite scene from one of my favorite movies. Jack has never been better.
I'm sure you are right on all counts about your sellers-- do you think it is because they "pay the commission, pay the freight" so to speak... If buyers paid commisions directly, I'm sure thy'd price shop and hop to different agents too.
That and I guess that honor and integrity count for a lot- unless they might cost me (seller) a nickle... :(
What do you think of accepting the higher price, with a pre-determined markdown schedule to get it to the right place fairly quick?
So- keep educating them, keep doing the right thing, and keep posting about common seller mistakes, I think you are on the right track here.
I need a contact in Miami from time to time, I'm on the vine, hope you'll stop in and visit...however, there isn't any you tube on my site-yet!
Permalink November 05, 2007 22:23:05 · http://www.LifeInBonitaSprings.comI tell the truth. I also only take listings that are priced right. If someone "buys" the listing I bless them and their listing.
What's that saying? Its always better to be the second spouse and the third listing agent? =)
Permalink November 05, 2007 22:35:50 · http://www.PopeHandy.comInes, you are right on target!!! It is so frustrating to know the market, know the numbers, tell the truth, then have the seller fall for an inflated value. When agents "buy the listing" by giving an unrealistically high price, they get exposure out of it. They have a marketing tool - a sign in the yard, something to advertise. It's not a smart business plan, but we all know agents who collect listings based on "the numbers game" that some of them will sell and it doesn't really matter which one as long as enough of them do.
The seller is hoping for that lottery-type win, the one in a million chance that someone will accept a crazy price. And it does happen sometimes - I have seen it and been amazed. Just not very often, so I wouldn't bank on it. Most buyers are too smart for that, whether you're in Miami, Florida or in Silicon Valley, California or anywhere else. Ultimately the seller is the most hurt from the overpricing. (Agents can be too, as they have high carrying costs.) And never more so than in a declining market!
I think we just need an "arsenal of numbers" to help clients and potential clients to make good decisions. Sometimes even that doesn't help - denial can come in amazingly strong with folks who want their price (whether an unrealistically lowballing buyer or crazy high pricing seller). Then you just have to let them go and wish them well.
Great post, Ines, keep up the good advice!!
Permalink November 05, 2007 22:46:27 · http://www.miamism.com/
Terry - it was a post that needed to be be written. I don't think it has to do with commissions anymore, it has to do with listing for higher to "test" the market, to see if it "works"....but ultimately, they are hurting their chances.
Rick and I don't take higher prices - we suggest a range and we stick to it. If they don't take our word for it, it shows how much the customer will trust us during the transaction.
We don't buy our listings, our intent is to sell them. btw - I just saw a youtube on your site. : )
Chris - I have NEVER heard that saying...you are too much!! LOL!
Permalink November 05, 2007 22:47:29 · http://www.miamism.com/Mary - the "arsenal of numbers" may not always work. I've been in situations lately where I show up with our marketing materials and well prepared and thought out listing presentation and the seller does not care. All they want to know is the bottom line, not realizing that pricing is part of marketing and without marketing, there is no sale.Permalink November 05, 2007 22:52:40 · http://www.BlogbytheBay.comI also find this frustrating. I just wrote a similar "rant", which I rarely do. I said "Hire someone who has the guts to tell you the truth even when you dont want to hear it". If an agent agrees with the price the seller sets despite what the numbers say, why does the seller need the agent? People should hire agents to work on their behalf, not to be their puppets.
Permalink November 05, 2007 22:58:40 · http://www.miamism.com/Nicely said Ginger. I think what's important for home sellers to understand is that there WILL be those agents that will be their puppets and WILL do what they want, but ultimately they will not be hiring them for the agent's expertise.Permalink November 05, 2007 23:19:13 · http://www.theblogthatatemiami.comInes, well done! This has got to be one of your best posts. I have lost listings time and time again (and refused listings as well) because I tell the truth. I don't want to stroke my sellers. I want to sell their homes.
Permalink November 06, 2007 11:45:03 · http://www.miamism.com/Thanks Maggie - (you know I prefer the shorter ones).....I figure if sellers don't want ethical, they'll get what they paid for or will pay for what they get????
Permalink November 06, 2007 13:31:07 · http://monikamcgillicuddy.com/wordpress/Excellent post Ines. I've been thinking of writing a simalr post as I see the same thing happening up here. Frustrating for sure!
Permalink November 06, 2007 22:40:05 · http://www.miamism.com/Moni - it needs to be written and re-written - it cannot be said enough.Permalink November 07, 2007 09:31:05 · http://blog.franklyrealty.comFrankly, a great post.
Have you ever thought about pulling up the other agent's past 10 closed deals? Maybe do it on the fly "What did that agent say he could get you? How about I give you $100 if they were able to get anywhere near list price in their last 4 deals?"
By showing that that realtor gets 92% of list, when the marketplace gets 95% (just making up stats) then THAT is powerful.
I also like showing in real time how they only have 5 photos and our company policy is to use the maximum # of photos.
Frank
http://Blog.FranklyRealty.com
Permalink November 12, 2007 23:47:38 · http://www.miamism.com/Frank - it pays to do the exercise. There is talk about one of these people ending up in jail because his sales don't represent the market and there HAS to be something funny going on. That's another post all together, but sellers have to be aware that they are also liable for crooked dealings from their agents.Permalink November 13, 2007 00:00:17 · http://www.VeryVintageVegas.comWe're in the biggest foreclosure market in the country. If the normal (not in trouble) sellers aren't willing to compete with the banks, there's no reason to be on the market at all. Sad but true. I've been guilty of being each of those agents at times, and this post taught me a lot about what I'll need to change.
Permalink November 25, 2007 01:28:34 · http://www.miamism.com/Jack - I appreciate your comment. Here in Miami, sellers are really not competing with listings in foreclosure - most of those homes were bought at the height of the market.....which means banks have to compete with those that can really lower their prices. It's not easy, but it's important to tell sellers the truth.Permalink November 25, 2007 09:22:09This post has no comments awaiting moderation.
