With the housing market slump, some real estate agents are practicing a sales technique called “Buying a Listing.” Unfortunately, this technique can hurt you in more ways than one if you are trying to sell your home. I’ll explain what this sales technique is and what the impact on you could be.
Let’s take a typical family that is ready to sell their home. Chances are that this family would have interviewed several real estate agents before they made their decision on which agent to hire. And chances are that all of these real estate agents came equipped with “comps” to help the family determine exactly at what price the home should be listed. The family chooses to go with the third real estate agent who recommended a listing price of $5,000 more than the other homes currently on the market. After all, the family knows how much time and money they put into the house, and they don’t want to just give it away.
That real estate agent knows that he can’t sell the home for as much as he recommended, but he gave the family that price just to get the listing, since most home owners will go with the agent who quotes the highest listing price. This agent will wait a week or maybe even two before recommending that the price be lowered because of market changes.
In the real estate world, this technique is known as “Buying a Listing,” and here are the ways it can hurt you.
Your home may be overpriced for the market before you reduce, which means more time spent on the market. The more time spent on the market for a home, the less it will sell for, generally, if it does sell at all. And houses that have been reduced tell potential buyers that the house may not be worth seeing.
Real estate agents talk to each other. If another agent has a reputation for constantly “Buying a Listing,” which not only takes business away from other agents but is also considered unethical, they may boycott any listings by this agent. In other words, they won’t bring buyers to your home.
Before hiring a real estate agent, make sure to do through research and get references or recommendations from others.
Mary Ann Romans writes about everything related to saving money in the Frugal Blog, technology in the Computing Blog, and creating a home in the Home Blog. Starting June 1st, don’t miss her articles in the Baby Blog. You can read more of her articles by clicking here.
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