Selecting an Agent Solely on Price Can be a Big Mistake

This is the time of year when listings begin to rise. It happens almost every year beginning sometime between August and October. We think October numbers might be pretty steady and we may not see that rise when they’re released later this month. It may not happen until November this year.

We have seen an uptick in listing appointments. Some sellers have a need to wait for various reasons, while others are just waiting for numbers to rise to a certain point.

We’ve noticed some sellers are interviewing multiple agents, which can be a good thing if you’re asking the right questions. One question we’ve been seeing a lot lately is a question that can lead to the biggest mistake a seller can make.

Sellers have been asking “What Price Should We List it For? While this is a perfectly legitimate question that needs to be answered, it shouldn’t be the determining question when selecting the Realtor to represent you.

Selecting an Agent Solely on Price Can be a Big Mistake

Obviously agents want to get you as much money as the market will allow. Unfortunately when an agent feels they’re in competition to “Win” the listing, they may tell you they think they can get more in hopes of not losing the listing to another agent. Each listing brings the opportunity to create buyers. They may sell your home once, but they can pick up as many as 20 buyers off your listing.

The longer they hold your listing, the more time that listing can generate buyers. Buyers they can go sell other things to. I would say that agents don’t win when they over-price a home because it won’t sell until the seller gets realistic. However, if the agent over-prices it and sells off of it, the agent can win. The seller never wins in this case, as statistics show homes that sit longer on the market typically sell for less later on than they would have had it been priced correctly upfront.

In the industry we call it “Buying a Listing.” It depends on two things. What is the agent’s motivation? Is it to sell your home or just get a listing? The other factor is maybe the agent doesn’t know better. They may not know the market, or understand the area. Market knowledge is crucial. Agents need to know the stats.

Whether the agent doesn’t know better, or is buying a listing doesn’t matter. Either event causes a seller to lose. And sellers walk right into the trap because the first question they ask is “How Much Can You Sell My Home For?” And then they select the agent who tells then the highest price because they can “Get” more than other agents, so they must be better.

The better way is to interview agents and see who best knows the market and has the best marketing plan to sell your home. Price should be discussed last. If you’re interviewing great agents who understand the market, prices should all be about the same. The real question should be which agent understands the market and can effectively market your home to home buyers.

The reason price should be discussed last is because it is the one constant. The market is what it is at any point in time. The variable is the agent’s ability to promote your home to the market and the agent’s knowledge, experience, and wisdom to properly interpret the market.

If you really want to hire the best agent, spend your time seeking answers to the variables and less on the constant. In fact, I would go a step further and say you should select the agent you’re going to hire, then agree on the list price. Doing it in reverse is just asking for trouble and won’t answer the questions you need answers to, which is does your agent understand the market and who promotes your home the best.

If you’d like to search the MLS and do some of your own research visit www.LeeCountyOnline.com or call us at 239-489-4042 We’re glad to help.

Good luck and Happy House Hunting!