Sellers…Don’t Fall for These Agent Tricks When Selling Your Home

 
According to the National Association of Realtors (“NAR”) 2015 Profile of Home Buyers and Sellers, 72% of sellers select the first agent they interview to sell their home. That seems ridiculously high…just because an agent is “first through the door” doesn’t mean he/she is best suited to market your property for sale.

EVERY AGENT WANTS YOUR LISTING AND MOST WILL SAY ALMOST ANYTHING TO GET IT!

I have lost plenty of listings to other agents, it happens. I am so brutally honest with sellers, sometimes to a fault, that I at times lose listings to other agents usually because they will tell an owner anything.

The Magic Offer:

This is probably the most egregious method some agents use to get listings. Let me share a specific story that occurred recently:

I met with a homeowner who was listed as a FSBO (For Sale by Owner). It was a VERY expensive listing, over $10,000,000. The owner and I had great rapport. He was a tech guy into website design, SEO, digital marketing, etc. We hit it off. While talking about technology, he told me specifically “90% of agents do not know how to effectively market properties to sell.” He was smart. A tech giant. He could see through any crap an agent could give him about how their digital marketing expertise, blah, blah was better than everyone else. As I said, this guy was a tech expert. He could look at an agent’s website and see how it ranked, where it ranked, traffic, worldwide reach, etc. When I left his home, he immediately emailed me about how refreshing it was that I “spoke his language.” See, he could see that everything I knew about digital marketing was accurate, it’s what I do…again, I got you to my website didn’t I? He liked my website (the one you are on right now), and I thought I was certainly going to meet him again to secure his listing.

After speaking with him a few more times over the next few weeks, he informed me that he was going to list with another agent. He told me who it was and even why he chose them. Here is the kicker…He told me how this other agent had recently brought him 2 offers from 2 different clients to purchase his home…yes, the home that is asking well above $10M. When I asked him why either of the offers didn’t work, he told me they just couldn’t come to terms. Really? With 2 different offers?

Here is what most likely happened, and this happens a lot…this agent made up 2 magical buyers with 2 magical offers. There was never a real buyer, or 2 buyer’s in this case. This was only a strategy intended to show the seller that this agent has buyers like this, in this price range, lined up and ready to buy. And since this agent has already brought the seller 2 “buyers” without really marketing the property, just think what they could do once they have that coveted exclusive listing agreement signed and could market the property to their extensive network of foreign billionaires. Give me a break! No agent has 2 $10M plus buyer’s that just happen to be interested in the exact same property at the exact same time.

Unfortunately, even though the seller loved my website, my digital marketing expertise, the fact that we spoke the same tech language…he chose an agent that had no online presence whatsoever and no digital marketing expertise because that agent had a stable of unicorns lined up to buy his property…as soon as the owner signed an exclusive listing with them of course. It will be interesting to see what happens with this property over the coming months.

Overpromise (LIE)/Price Reduction:

“Yes Mr./Mrs. homeseller, the price you think your home is worth is exactly where we should price your home” is at the top of the list of crap agents use to secure listings. So many agents blindly agree with a seller’s idea of their own value just to get their sign in the front yard…and then go back after 3 weeks of no calls or showings to get a price reduction. The moment an agent is hired and their sign is in the yard, the chance of a seller firing that agent is slim, and agents know that.

For example, when I meet with a seller, and they tell me their home is worth $1,000,000, I do not just blindly agree. I have done my research…a full statistical breakdown of all homes in the neighborhood. Recent sales, pending sales, available inventory…I know the home is worth $875,000, and I tell the seller that. Usually, after a bit of back-and-forth, we say our goodbyes and I never hear from that seller. A few weeks later, their home is listed with another agent at $1,025,000…it sits for a month, reduced to $975,000…a few more weeks, reduced again…and finally sells near my original estimate of $875,000.

The Fake Buyer:

This is a rather offensive and very dishonest practice done by some agents. An agent will ask a friend of theirs to accompany them to an open house being hosted by a FSBO. The friend is supposed to act as a buyer and pretend they are very interested in the home. The seller then continues speaking with that agent for several weeks about the “buyer” they brought to the open house. The agent then informs the seller that the “buyer” had purchased another property but would love the opportunity to list their home for sale. Since the agent and seller have now built rapport, the agent has a leg up on the competition to get the listing.

To take the “fake buyer” a step further, it sadly works for more than just securing the listing. I know of an agent, and have no respect for him, that was in fear of losing a listing and was trying to get the homeowner to extend the listing agreement. He asked a friend to dress very nicely and even rented the friend a very expensive car. The friend then arrived at the home and toured it posing as a buyer. The homeowner was so excited about this potential “buyer” that she agreed to extend the listing with the current listing agent. Did I mention this was a $10M listing?

These are just a few examples of things that agents will do to get listings. Most of the agents in this industry are honest, hardworking and ethical. Unfortunately, like other industries, there is a small percentage of people that hurt the overall reputation of real estate professionals.

Cautionary Tale:

I was showing property in Coral Gables to clients from NYC late last year whose budget was $10M. We visited a home that was listed at $9.9M and they fell in love. We sat down to discuss an offer strategy and to our surprise, comparable sales put the home’s value at $6M…40% below list price. In addition to being a bit discouraged, my clients were also dumbfounded as they explained to me that in NYC, almost all properties sell near, at or above asking price and they assumed that translated to our market.

When I called the listing agent and explained this to her, she agreed that the home was only worth $6M, but said the seller was stubborn and wanted to list for $9.9M…but it was actually higher. Upon further research, this property had been on and off the market with list prices as high as $12.5M. Instead of the current listing agent being honest about the homes true value, she took the listing anyway (see what I mean about taking listings at any price).

Soon after this, she lost the listing when it expired, obviously because no one was willing to overpay by 40%. But this is where it gets interesting… Another agent went after the listing and secured it 9 weeks later. Would anyone like to guess as to what the new list price was??? $11.9M!!! This agent walked in and wanted the listing so bad that he told the owner he wanted to raise the price $2M!!! This is absurd!

After 6 months, and no activity, the agent talked the homeowner into selling the property at a no reserve auction which is coming up within 2 weeks. When the home sells at auction with a sales price that starts with a 6, the homeowner is going to be severely disappointed but the auction company AND the listing agent will still get their commissions.

What Can Sellers Do When Interviewing Agents?

First, please read the article that I published recently titled “Seller Beware: Agents Will Try to “Buy” Your Listing?” It is a little added education for sellers.

1. Interview multiple agents. Sounds simple, but as I stated to open the article, 72% select the first agent they interview.

2. Listen, Listen, Listen. Listen to everything that each agent tells you. Take notes to discover what marketing techniques are important to you.

3. Get marketing examples. Ask each agent to give you pieces of their marketing. Whether it be postcards, digital marketing or ads, ask to see different pieces. Ask yourself, if you were a buyer, would these different marketing examples make you want to go visit these properties?

4. Did you know that 75% of home buyers find the home they are going to purchase online? Do these agents have an online footprint? If not, beware…and if so, these agents should go to the top of your list of potential listing agents. Ask the agents to show you web traffic, clicks, visits, etc., to prove to you they advertise online.

5. Ask the agent how they can effectively market your home for sale internationally. Marketing internationally effectively (with the key word being effectively) is a must in the Miami real estate market, as more than 50% of Miami buyers are foreign. Agents will tell you that their brokerage markets internationally, and may even have “International” behind a name or designation…usually this is just fluff. The one thing I can tell you is that Douglas Elliman effectively markets internationally across 6 continents in 484 offices throughout 59 countries with an exclusive partnership with Knight Frank, the largest real estate firm on the planet…hence why Douglas Elliman sold $22+ Billion in real estate last year!

6. Every agent claims to have a buyer’s database. Where did they get this database? How was it collected? Ask the agent where this database came from. Are these buyers the agent has worked with in the past? Did they purchase the list…I hope not. My list, for example, has been collected over years and includes buyers I have actually worked with, spoken to or have visited my website while searching for real estate…real buyers.

The 3 P’s

The three P’s of real estate marketing for MOST agents: Put a sign in the yard, Put it on the MLS…Pray that it sells! My main advice to sellers…do not work with an agent who only uses the 3 P’s for their marketing strategy!

If you are interested in selling your home or condo in South Florida, or simply have a question about the real estate market, please contact Michael Light, Director of Luxury Sales at Douglas Elliman, for a full marketing presentation of how we can market your home to sell for the highest possible price. You may reach me on my cell at (786) 566-1700, directly at my office at (305) 350-9842 or via email at michael@miamiluxuryhomes.com.