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This is very misleading advise and "old market think".
Sellers and plenty of random agents do not understand how markets work.
Whoo Hooo the claws come out quickly!!!
That's what they want you to think that they have knowledge that you don't have. Which is not really not true anymore. With proper research you can be just as well prepared and versed in your local market as any agent. Realtors have a nice racket going on convincing people that you can't make these decisions for yourself.
And while it is true that a large part of an agents goal is to ensure future business you cannot deny the fact that it is more beneficial for an agent to sell quickly. A higher price does not matter as much to an agent as it matters to a seller. So what the agent does is assure you that they know what they are talking about and helping you make the decision that's best for you. While implying that you couldn't possibly understand all the big numbers they do.
I'm no expert, this is just the facts as I see them and as research has pointed to, will try to find link to this information. I know it can be found in the book Freakonomics. I believe in chapter 2...
I spoke with a buyer's realtor today who had brought clients through for a second showing last week. He was calling me to tell me the clients had decided not to put an offer on the house and give me feedback about the various things that were factors in their decision. He spoke with me for quite some time.
A couple of things he told me during our conversation that I wanted to get your opinion on:
1. He said that he always tells his sellers that if they have not received an offer after 10-15 showings, it's time to lower the price. Does this sound right to you?
2. He told me there are 2 strategies for lowering price....in increments, for example $5,000 at a time, every couple weeks, or in one big chunk that would take us into the next lowest price category on the real estate search engines. With regard to this, he said the latter is often the better technique because it makes the house a great deal and encourages multiple offers which can then drive the price up.
Our house is currently listed at $324,900 so if we were to take the second option, the price would be lowered to $299,900 which definitely would make our house a very good deal. However, we are not interested in selling our house at $299,900.
3. He told me that a seller is not obligated to accept ANY offer, even if the offer is at the listing price or higher. Is this true? So we could change our listing price to $299,900 just as a strategy to bring in multiple bids with no intention of accepting any offers at that price? If we refused an offer at list price with no good reason, wouldn't that open us up to potential lawsuits by buyers who claim our refusal to accept an offer is based on discrimination?
This realtor was very helpful and spoke with me for a long time but of course, I am being cautious because I suspect he may have motives, for example wanting our business as sellers, or even trying to rope those buyers who came back for a second showing back into the game. He told me these buyers have been dragging their feet for a long time and had a contract on another house that they withdrew because they changed their mind. It was clear he wants to wrap things up with them. He even joked about how low his "hourly rate" is on these clients at this point (because of how much time he's spent working with them so far with no purchase).
Thanks in advance for any comments and input.
I am not sure if NJ is different from NY, but in NY you would have to pay comission if a RE brought you offer at listing price or above. Noone can make you sell the house, but threy can make you pay the comission. The only strange thing in the whole story that some other agent gave you a leson in how to sell your own house.
Got an answer? Well I just sold my house and my reason was to move closer to family for my toddlers sake. I had 5 agents come see my house in Seattle. Their recommend list price ranged from 490k to 525k. I wanted to sell, we wanted to move we had made our decision. We listed for 489k and the house sold in 3 days (this was 2 mths ago) for 500k. In this market if you want to sell you can, it's all about price. If you're not willing to take 299k now then think about staying.
Tough but true, believe me when I say I wanted 550k for my house
That's what they want you to think that they have knowledge that you don't have. Which is not really not true anymore. With proper research you can be just as well prepared and versed in your local market as any agent. Realtors have a nice racket going on convincing people that you can't make these decisions for yourself.
And while it is true that a large part of an agents goal is to ensure future business you cannot deny the fact that it is more beneficial for an agent to sell quickly. A higher price does not matter as much to an agent as it matters to a seller. So what the agent does is assure you that they know what they are talking about and helping you make the decision that's best for you. While implying that you couldn't possibly understand all the big numbers they do.
I'm no expert, this is just the facts as I see them and as research has pointed to, will try to find link to this information. I know it can be found in the book Freakonomics. I believe in chapter 2...
You could have saved a ton of syllables by standing pat on the fact: "I'm no expert..."
Eloquence in minimalism.
Does Freakonomics tell about the number of sellers I represent who leave significant money on the table because they ignore my expert advice?
Probably not. It wouldn't have sold as many books, I think.
You could have saved a ton of syllables by standing pat on the fact: "I'm no expert..."
Eloquence in minimalism.
Does Freakonomics tell about the number of sellers I represent who leave significant money on the table because they ignore my expert advice?
Probably not. It wouldn't have sold as many books, I think.
Just trying to throw up the red flag that many agent's motives are driven by the quick sale. No Need to get so upset and defensive, you're just doing the best job for yourself, I personally don't blame you and would do the same thing myself. It's the expert thing to do.
Consider....
Due to the way commission is structured, it's not in the real estate agent's best interests to get you the best price for you home. Let me repeat that...it is not their priority to get you the most money for your house.
No, they want a good price, but they want a quick sale. It is far more profitable to get you to take the first reasonable offer that comes along, than wait another week or two and get $310,000 instead of $300,000.
The incentive problem.
Let's looks at that more closely. At first it seems well worth the wait. Two weeks for $10k. For you, it is good. Of that $10k you get around $9400. The other $600, that's the 6% commission fee, gets split 3 ways. Half goes to the buyer's agent. Then the real estate agent gets $150 and her firm gets the other $150.
$150? For all that time and extra work? Not so great now, and you know, I'd feel the same way.
Just look at the numbers. It's simple math.
Sell the house now for $300k, make $18k commission and get $4500 cold hard cash.
Or, wait for two weeks or more, do a lot more hard work, sell for $310,000, and get $4650 cash.
It's clearly not worth the wait, when you could sell early and start work on another commission. This is the problem. Big incentive for you, tiny incentive for the expert. And the experts have many tricks up their sleeves to ensure a quick sale and easy ride.
Or, wait for two weeks or more, do a lot more hard work, sell for $310,000, and get $4650 cash.
How much more work do you think an agent does in two weeks on the market? Most of the work is done prior to listing or at the time of listing. From then on it is monitoring the market and tweeking marketing. I would go with this argument if I could sell a house before I listed it, but two weeks, two months even is not a significant amount of work compared to getting the initial marketing launched. I don't buy the "a lot more work in two weeks" argument.
I have also had numerous sellers in multiple offer situations that turn down the HIGHEST price offer to go with a cash offer or more solid buyer. While some real estate agents are dolts, most are not. Yes...sellers have actually made the choice to take less money for a sure thing.
I haven't read Freakonomics, so I can't speak for the study but I can also say that most agents stage/prepare their homes when selling. At least out here. I can EASILY see that 3.7% bump due to doing what they need to do to get the home ready for market. There are numerous staging studies out there about how staging will garner a seller more money. Did they look at that in the Freakanomics study?
Staging is absolutely critical couldn't agree more. While Freakonomics does not speak to this subject, my own personal experience has been that a properly staged home sells itself, no agent required.
That's what they want you to think that they have knowledge that you don't have. Which is not really not true anymore. With proper research you can be just as well prepared and versed in your local market as any agent. Realtors have a nice racket going on convincing people that you can't make these decisions for yourself.
Go back and reread what I wrote.....
Appreciating Markets: Time is the seller's friend and yet most sellers take the money and run.
Depreciating Markets: Time is the seller's enemy and yet, most sellers wait and wait and wait for someone, anyone to come along and pay them what they think their home is worth. It rarely works out that way.
In other words, consumers have a tendency to function counter intuitive to markets. And a lot of agents do too.
Just trying to throw up the red flag that many agent's motives are driven by the quick sale. No Need to get so upset and defensive, you're just doing the best job for yourself, I personally don't blame you and would do the same thing myself. It's the expert thing to do.
Consider....
Due to the way commission is structured, it's not in the real estate agent's best interests to get you the best price for you home. Let me repeat that...it is not their priority to get you the most money for your house.
No, they want a good price, but they want a quick sale. It is far more profitable to get you to take the first reasonable offer that comes along, than wait another week or two and get $310,000 instead of $300,000.
The incentive problem.
Let's looks at that more closely. At first it seems well worth the wait. Two weeks for $10k. For you, it is good. Of that $10k you get around $9400. The other $600, that's the 6% commission fee, gets split 3 ways. Half goes to the buyer's agent. Then the real estate agent gets $150 and her firm gets the other $150.
$150? For all that time and extra work? Not so great now, and you know, I'd feel the same way.
Just look at the numbers. It's simple math.
Sell the house now for $300k, make $18k commission and get $4500 cold hard cash.
Or, wait for two weeks or more, do a lot more hard work, sell for $310,000, and get $4650 cash.
It's clearly not worth the wait, when you could sell early and start work on another commission. This is the problem. Big incentive for you, tiny incentive for the expert. And the experts have many tricks up their sleeves to ensure a quick sale and easy ride.
Sheesh... Certainly not upset. Or particularly defensive.
It sometimes seems that way to people when they cannot perceive any motivations but the crippling greed which is their own personal weakness. But that is not a reflection of ME.
Again, if you had quit with "I'm no expert," you would have nailed truth in the bullseye.
Or, if you had told me where Freaknomics addresses the many thousands of dollars that clients leave on the table by failing to follow my expert advice. But that would not support the perspective of greed from which you post, would it?
Simple math may satisfy the greedy who fawn over it, and have no other moral compass within.
I'm not impressed with the corruptness of human motivation it reveals.
Staging is absolutely critical couldn't agree more. While Freakonomics does not speak to this subject, my own personal experience has been that a properly staged home sells itself, no agent required.
For sellers that are willing to educate themselves or take the time to do it. This is very true.
What I always find interesting is the strong slant that agents are self-centered and only interested in themselves as presented somewhat in the article you quoted. Then there is the "extreme agent script" that consumers can't do a home sale on their own. The real truth is that there are several types of sellers...
1) Sellers who have the knowledge or take the time to get the skills they need to sell their home on their own with no agent involvement at all (true FSBO's).
2) Sellers that are the above but recognize that agents know most of the buyers and they do an MLS only type of listing.
3) Sellers that think they know what to do, but don't. Often they try MLS only or FSBO and then list with an agent.
4) Sellers that know what to do but don't want to, so they list with an agent.
5) Sellers that don't know what to do, so they list with an agent.
6) Sellers that are so unreasonable that it doesn't matter if they try and sell FSBO or with an agent, house isn't going anywhere fast...
I recognize that all of these scenarios exist in the real estate world and am fine with that. If you don't think agents bring anything to the table that is fine, but at least acknowledge that not everyone wants to do things your way. Some people really do hire agents because they want to.
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