Beware of the real estate agent that recommends a list price that sounds too good to be true. There are several reasons that real estate agent overprice properties, none of which benefit you and in the long run can negatively affect you bottom line.
- They don’t know any better. Real estate agents and real estate brokerages are not created equal. Real estate agents have lots of choices in selecting brokerages and some select brokers that offer little to no training in order to maximize their income. These agents may try hard but they simply don’t know what they don’t know. Look for an agent that works with a brokerage with good standing in the community and a history of developing top producing agents. Top brokerages offer training in Seller Representation which includes in-depth training in property valuation.
- Their “buying” the listing. Some agents overprice properties so that the seller is more likely to list with them. This often happens when the agent is looking to build their listing “inventory”. One of the best ways for a real estate agent to grow their business is by listing lots of houses. The more houses you list the more prospective buyers you find and more buyers mean more sales. This agent is interested in their numbers and not yours.
- They don’t care. These agents have the knowledge needed to accurately price a house but that involves work. An in depth pricing analysis that includes researching active listings, pending listings, sold listing and neighborhood trends takes a good agent 4 to 6 hours. As in any business some agents are burned out or jaded and don’t think they need to thoroughly research pricing.
The best way to ensure that you find a great agent that represents your interest is to treat your meeting like a job interview.
- Ask about their background, how long have they been in real estate and how much training and support do they have. A newer agent can do a great job as long as they have broker support and mentorship.
- Ask for specific pricing data. The agent should bring with them specific information about properties that are comparable to yours. In order to compare apples to apples the agent should have made value adjustments to the comparable properties so that
- Ask about their listing statistics. To be a good listing agent you don’t necessarily to have sold 50 homes but a good listing agent can demonstrate competence with statistical data. Ask about the average days on market of their listings. What was the list price to sold price ratio? How many price reductions were needed to find a buyer? These are all great questions that demonstrate the agent’s competence.
- Ask for references. Ask for the names and numbers of past listing clients. Call them an ask questions about their experience and the integrity of the agent you are considering.
In the end you should select the listing agent that you feel you can trust and are comfortable with. Your agent is representing you in the sale of one of your largest investments. You need to feel good about the relationship and be confident in their skill level.
Terry Roberts, Broker Owner