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Buying a Listing

September 5, 2010

Buying a ListingYou’ve decided to sell your home and you think you know what it’s worth. So you set up a few appointments with the local Realtors that have been mailing you their postcards for years. Each real estate professional provides a “Competitive Market Analysis” for you showing their opinion of the current market value of your home.

Oddly enough the first two Realtors have come up with probable sales prices similar to one another, yet below what you feel your home is worth. You’re quite frustrated. But then you meet with the third Realtor and he presents his Competitive Market Analysis which shows your home worth significantly more than the first two Realtors seemed to think it was worth.

If you’re like most people the news the third agent brings puts a smile to your face. You hire him on the spot. Clearly he is going to work harder for you to bring in top dollar for your home. If the first two agents had such a low opinion on the value of your home how are they going to negotiate and bring in the best and highest contract?

The third Realtor just engaged in a practice called “Buying a Listing”

He “bought” the listing by suggesting you might be able to get a higher sales price than the other agents recommended. More than likely he knows fully well you will never sell at the suggested list price. But he knows once he secures the listing (buys it!) he will probably be able to convince you to reduce the price over time.

Why do some agents buy listings?

Because it works. It is human nature to want to be around people that say things that make you feel good. The liar that tells you that your home is worth more than it really is worth is taking advantage of basic human psychology. He says what you want to hear, which makes you happy, and you hire him. Then, over time, he slowly breaks it to you that your home mysteriously isn’t attracting any buyers and he suggests repeated price drops.

As a Realtor who doesn’t believe in buying a listing I strongly suggest you don’t reward the liar by giving him or her repeated price reductions. His dishonesty and unethical behavior cost you time and money.

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Comments

11 Responses to “Buying a Listing”

  1. C Richey on September 5th, 2010 3:10 pm

    Great post Chris. Sad but true (I love the picture). Unfortunately, as an agent and a home owner, you will run into this all the time. There are agents out there that will do anything to get a listing.

  2. John Clark on September 7th, 2010 11:07 am

    Great issue to bring up for homesellers, I think a lot of agents are doing this in today’s market. Homeowners just don’t want to accept that their home is worth less than what they expected, and they’d rather hear a fantasy than a reality from a realtor. Many are all too happy to provide that.

  3. Real Estate Seattle on September 11th, 2010 5:36 pm

    Great article Chris. I totally agree, and when an agent “Buys a listing” it is really detrimental to the seller. They end up setting there mark way to high at first, then proceed to sit on the market for a long time. And as we all know the longer time a house is on the market the more the price is going to have to come down to sell. By pricing a home right, staging it and marketing it the way a professional agent should, you will yield much better results. With the right agent your initial price may be lower than the agent who’ll “Buy the listing” but you will most likely ultimately walk away with more money in your pocket and a sold sign in front of your house!

  4. Homes Palo Alto on September 15th, 2010 5:20 pm

    You are absolutely right Chris. I read and article last week that stated that in my area, 2/3 of the homes sold, were sold by the second or third Realtor to list the home. How frustrating it must be for these sellers and realtors to have to go through all of those price drops.

  5. Mark Walker on September 18th, 2010 9:05 pm

    This was really well said. Sometimes it is necessary to say the things people don’t want to hear. It’s all about the consumer.

  6. Palmdale homes on September 20th, 2010 7:56 am

    This is a very common practice. I’ve heard people talk about it at the last office I worked at in a very matter of fact way.

  7. Simon Campbell on October 5th, 2010 7:45 pm

    It’s too bad realtors have to do this. Does this border on unethical?

  8. Chris O'Connor on October 5th, 2010 8:54 pm

    Buying a listing is only “buying” a listing if the Realtor is lying in order to obtain the listing. So yes it is unethical, yet incredibly common.

  9. Investment Hanoi on October 14th, 2010 3:51 am

    I’ve never understood why anyone would try to “buy” a listing! Before I got into real estate, I always thought 2 things when I saw a For Sale sign that stayed and stayed and stayed:

    1. Seller wants too much
    2. Agent must not be very good

    My thoughts haven’t changed a whole lot-but the reasons for #2 have been updated as to why!

    I’ve told sellers who wanted an unreasonable price for their property that I wasn’t into providing lawn ornaments, I’m into selling their house!

  10. Rebekah Whiteman on October 27th, 2010 2:49 am

    I found the post to be well written and I loved the fact that it highlighted a little known issue. Most home buyers and sellers are aware of the fact that there are real estate agents who would do anything to get their share of commission, but I don’t think most people are familiar with the unconventional ways these agents use to dupe people. I would advise people not to appoint an agent who boasts about an extraordinary track record or making a huge amount of money. Rather it is better to hire someone who is honest and listens carefully to what his/her clients want.

  11. Glen @ Kamloops Real Estate on February 9th, 2011 5:32 pm

    Well said, and yes, this whole principle is very annoying! But how do you get around it? There are a number of realtors out there who do this just to get the listing, and they seem to win over other agents more often than not. But what do we do about it?

    How far would you go if facing this situation? Do you tell the seller that you will take the listing at their price, as long as they reduce if you get no action? Or do you just bypass the listing? Because, in the end, every listing you have drives traffic and interest your way. So, do you accept these stubborn, sacrificial lambs?

    Personally, I won’t do that. If the seller is being unreasonable, I’d rather decline and work with someone who understands how the market works. In the end, I’ll get the job done, do it well, and leave the client happy.

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