Realtor - Amanda S. Davidson: Real Estate Agents Giving Sellers False Hope On Market Value

Real Estate Agents Giving Sellers False Hope On Market Value

Real Estate Agents Giving Sellers False Hope On Market Value
Inventory in many areas is low – extremely low, in some locations even historically low. Real Estate agents telling sellers that they can sell their home at an unrealistic price just to win the listing is nothing new but, it becomes more prevalent when low inventory is a current market trend. Low inventory is a positive factor for sellers, it all comes down to supply and demand, but, when inventory is low some agents take the path of telling a seller whatever they want to hear just to get the listing.

Market Value

 

In a seller’s market having more listings is something agents covet. Why wouldn’t they? Homes in Alexandria that are priced correctly and located in sought after neighborhoods are seeing multiple offers. Competition for a listing from multiple buyers is a listing agents dream. The sellers are thrilled and the agent is too, contingencies waived, offers above list price … you get it. The dark side to this type of market is real estate agents not being honest about what a home’s current market value is. Market conditions change gradually and that includes rising prices. They don’t jump up by for example $50k overnight. Properly pricing a home comes from studying the comps, current market conditions, condition of the home, location of the home etc. It does not come from an agent’s opinion of what it will sell for just because there aren’t other homes to pick from. Pricing is one of the most important components of a successful sale and if you get it wrong from the start it’s not going to be pretty for the seller.

Market Value

 

I met with a seller a couple weeks ago and they were upfront that they were interviewing multiple agents. I expect pricing recommendations to vary and am never surprised if there’s a difference of $10k - $20k. Pricing isn’t based of a set formula and when that’s the case there will always be some type of variance. In this case however, I was blown away when the seller told me that there was a difference of $100,000 if they looked at the lowest price suggested and the highest. WHAT? I always try to put myself in the seller’s shoes and if you’re looking at your bottom line thinking you could have $100k more in your pocket I can understand why that would make you want to list with the agent that suggested that price. That’s a lot of money! However, the market prices your home and buyers resist overpriced homes, I don’t care how low inventory is. If there isn't data to back up the price you're headed down a costly path.

Market Value

 

Telling a seller what we think they want to hear just to win a listing is beyond unprofessional and against the code of ethics. That said, it happens regularly and unfortunately is more prevalent with the current market we’re in. For the ethical agents this is frustrating to say the least. We have a responsibility to be honest and provide a realistic market value for the home. It’s not an opportunity to toss an outrageous price against the wall just to win the listing.

Selling Your Alexandria Home

 

As a seller going with the agent who says they can sell your home for the highest price doesn’t mean you’re making the right decision on who is representing you. Your home is only worth what a buyer is willing to pay. Review the numbers each agent provides and ask them to explain how they arrived at their suggested list price. Agents who are recommending a realistic price will be able to go over every detail to show how they arrived at the price. Think about the cost of your home sitting on the market. I always compare it to stale bread – no one pays top dollar for stale bread. The longer your home sits on the market the less you’re going to sell for. Dropping the price until buyers see the value is a sure way for a seller to leave money on the table.

 

 

 

Amanda Davidson Real Estate Group

 

 

      

 

Amanda Davidson

Amanda Davidson Real Estate Group

Broker - Owner
Licensed in VA and DC

5680 King Centre Drive #600
Alexandria, VA 22315

Cell: 703.431.3755
Fax: 703.562.7057




Comment balloon 44 commentsAmanda S. Davidson • March 09 2018 01:41PM

Comments

Love this message, Amanda. I consider agents who lie about a home's value just to "buy" the business completely unethical. Our code of ethics requires honesty, afterall. 

And as I've been telling clients for a while now... just because the market is hot and there's a shortgage of inventory doesn't mean you can go crazy with your asking price.... overpriced houses don't sell even in a hot market.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage ) about 1 year ago

Carol Williams ~ hi Carol... my nomination, late as it is, for this week's Second Chance Saturday.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage ) about 1 year ago

Good morning Amanda S. Davidson ,

You raise a very important message that is prevalent especially in a sellers market. Buying a listing doesn't help anyone! We have a responsibility to be honest and provide a realistic market value for the home.  When we tell a seller an unrealistic  price to win the listing is unprofessional and against the code of ethics. I feel a gold star coming your way!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) about 1 year ago

Amanda: Agents who "buy" the listing typically are long gone by the time the property does sell. It is such a disservice to homeowners to over-inflate a home's value when the agents know it will never appraise for that value.

Posted by Anita Clark, Realtor - Homes for Sale in Warner Robins GA (ColdwellBanker SSK Realtors ~ 478.960.8055) about 1 year ago

We see this sometimes and it is disappointing that an agent would do this!

Posted by 1 ~Judi & Don Barrett & Chassy Eastep - Integrity, BS Ed, Integrity Real Estate Services -IDABEL OK (Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745) about 1 year ago

Amanda, Sellers are completely excited when they see high dollars on the offers, but I always warn them not to COUNT on those dollars until the appraisal comes in, especially if the buyer is not offering to bridge the gap.

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (House to Home, Inc. - Denver Real Estate - 720-231-6373) about 1 year ago

So true. I'm thinking we may have recently lost a lovely listing to an overpriced promise from another agent. We are always philosophical about it though,  and  we'll hope they call us in a few months when the over-priced home fails to sell at the inflated price. D 

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) about 1 year ago

Great post!   I have walked away from many a listing! 

I have only had one BAD review in my entire career and it was because I informed a seller what the comparable data showed and what would most likely happen when it came time for the appraisal.    She insisted on listing her home for $425K and it appraised for $393K (exactly like I informed her it would and she was pretty mad!).   

Posted by Dusty Rhoton SRS, MRES, ABR, SRES, GRI, Flagstaff Real Estate (RE/MAX Fine Properties) about 1 year ago

HI Amanda S. Davidson - $100,000 difference is really outrageous. I would hope the seller would remember that old saying "if it sounds to good to be true...it probably is!". I know that you could be trusted to list the home at the right value. Your sellers can sleep easy knowing you have their best interest at heart.

Posted by Sheri Sperry - MCNE®, (928) 274-7355 ~ YOUR Solutions REALTOR® (Coldwell Banker Residential Brokerage) about 1 year ago

One of the first things out of my mouth at listing appts is that I wont inflate the home price just to get the listing, and then come back every 3 wks looking for a price reduction

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) about 1 year ago

Hi Amanda, this is a very Smurf and well-presented post. Well- done and definitely gold star worthy.   

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 about 1 year ago

We just went on a CMA in a low inventory market area. We found out that we were the 2nd agent they called. We gave them a top price of $360,000 at best...Agent #1 gave them a price of $489,000. They haven't listed yet and we will not waiver our estimated price. There is no way they will get anywhere near the other agents price!

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Home and Condo Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) about 1 year ago

Honesty is paramount, agents need tro tell sellers what they need to hear so they can achieve their goals in a realistic time. Far better to explain how the market works and let the market guide your seller to the right price. Great post. Sellers are wise when they pick up the phone and call you.

Posted by Nick Vandekar, 610-203-4543, Tredyffrin Easttown Realtors, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 1 year ago

So true, Seeing more of that here and have lost listings for it. I refuse to up a listing price to get a listing. Great post! 

Posted by Ruth Grainger-Starr, providing AWESOME real estate adventures (Grainger Realty) about 1 year ago

I have never been a big lister because I leaned more heavily on truthful disclosures and not fairy tales when discussing values.  Your post was right on!

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) about 1 year ago

I'm in a low inventory area as well. Still a realistic asking price is needed because buyers are educated on the market& review comparables with their agent to see if it is priced properly. 

Posted by Jonathan Hall, Realtor - Danbury,CT Area Real Estate~203-417-0523 (William Pitt Sotheby's International Realty) about 1 year ago

The S F Bay Area has a housing crisis. There are simply not enough homes for sale or rent. So…prices have been constantly moving up. That said, it is still possible to over-price a listing. In markets like this there is always a tendency on the part of sellers to believe their house is better than the last one that sold and worth more. It may be, but how much more is the question. I have seen houses sit until the list price is reduced even in this market. Sellers who opt for the new record price in their area may be disappointed because they believed an agent who told them what they wanted to hear…even though all parties knew the price to be fanciful and not reality.

Posted by John Juarez, ePRO, SRES, GRI, PMN (The Medford Real Estate Team) about 1 year ago

I have lost several listings because of my belief that a suggested list price should be based on fact, not fiction!

Posted by Margaret Goss, Chicago's North Shore & Winnetka Real Estate (Baird & Warner Real Estate) about 1 year ago

Excellent points! A house is only worth what a buyer will pay. Giving a highly inflated estimate just to get a listing is not only wrong, it's a waste of the seller's time, effort and money. 

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com) about 1 year ago

Good afternoon Amanda - that 100,000 example is unethical.  I am sure you will want to follow this to see what happens.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 1 year ago

You are so right, Amanda. It's happening on this side of the mountain too. That's a handsome assistant you have there. 

Posted by Mike Cooper, GRI, Your Neighborhood Real Estate Sales Pro (Cornerstone Business Group Inc) about 1 year ago

Amanda

We are seeing some of that behavior here as well - we know it just doesn't work, and it's pretty obvious which houses are suffering from overpricing, whether drive by the agent or the seller!

Have a great weekend!

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) about 1 year ago

We know who those agents are and how they plan to work it. After a few weeks on the market they will balme the market and say a price reduction is in order. They should be truthful up front.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) about 1 year ago

Dear Amanda,

It eventually will have to appraise, so better to be upfront from the start.

Posted by Dörte Engel, ABC - Annapolis, Bowie, Crofton & rest of Maryland (RE/MAX Leading Edge) about 1 year ago

I have had several listing appointments that I was well prepared for. I share what the market is doing in their area and how I arrived at the market value of their property. 

Then, comes the big "but" on the sellers part. I really need this amount, which may be $30,000 more than market value. They will not budge and I will not go that high and waste my time or theirs.

I know they will find someone to list. So I watch and track the listing.

After a month or two, the price begins to reduce then the listing is terminated.

Another agent picks it up. And they reduce the price, still not where I placed the value.

I have homes that 3 years later still have not sold.

I agree with your post.

Thanks for sharing.

 

Posted by John Wiley, Lee County, FL Real Estate GRI, SRES,GREEN,PSA (Right Move Real Estate Group- EXP Realty) about 1 year ago

All too often sellers will believe what sounds really good.  Many are smart enough to ask for the proof, but unfortunately, some get taken in by greed.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 1 year ago

I am working on one now where everyone thinks THEY are the agent

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 1 year ago

It sounds like there are a lot of lying unethical agents out there.  They probably all are Realtors.  

Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) about 1 year ago

Like with anything in life, if it sounds too good to be true, one might find out that it was indeed too good to be true.

Posted by Brian England, MBA, GRI, REALTOR® Real Estate in East Valley AZ (Arizona Focus Realty) about 1 year ago

Hi Amanda

Glad to see that gold star AND being featured by Carol, too. This sort of thing happens all too often, although I suspect there are sellers who start out wanting more than the home is worth and agents, knowing the market, will take the listing anyhow and go for the price reduction later.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) about 1 year ago

Your home is only worth what a buyer is willing to pay, and if it is being financed what an appraiser thinks it is worth.

Posted by Michael Eisenberg, Bellingham Real Estate Guy (eXp Realty) about 1 year ago

Great feature Amanda by you again.  You make some great points that we all can remember.

 

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) about 1 year ago

      "Buying the Listing" to get a sign in the yard.  Not ethical!   And unless it's a cash deal, it may not appraise, even in a tight market.

Posted by Fred Griffin presently on Leave of Absence, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 1 year ago

This has gone on forever, even in a buyer's market. I once worked (very briefly) for a broker who would tell sellers some inflated price, then tell buyers "But I know I can get it for you for..." Next he'd go to the sellers and tell them the market had shifted.

What a sleaze.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) about 1 year ago

I just looked... in my area there are 80 homes listed between 150 and 300k.  Of those, 8 are not under contract.  Of the 8 not under contract 3 are about $30k above the price they should be at, with only 1500 square feet... so there are 5 new listings on the market.  Great point!!

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) about 1 year ago

And then, even if the overpriced home would sell, it must appraise out, Amanda S. Davidson ... this being the issue that I see as another huge hurdle, if financing is involved.  It's an issue cropping up with more frequency, as of late ...

The housing shortage is creating many challenging sales and financing issues.  We professionals must remain vigilant ... and honest with what is possible and what is not ...

Gene

Posted by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, 708.921.6331 - 40+ yrs experience (NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656) about 1 year ago

Hi Amanda S. Davidson, too bad, it's happening in all markets. I've lost a few listings just within the past year because of this.

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) about 1 year ago

Greed by the seller is a big part of it and of course, "buying" the listing by an unethical real estate agent is a big part of it as well. And there are quite a few agents doing it unfortunately...

Posted by Eva B. Liland with Century 21 Doug Anderson, Glad to be of Service (Century 21 Doug Anderson) about 1 year ago

Great advice.  Hiring an agent based on price is NEVER  a good idea.  Numbers aren't the entire story. If a home doesn't show well and an agent promises a high price, that home will sit and sit in some markets.  

Posted by Jan Green, HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN (Value Added Service, 602-620-2699) about 1 year ago

Our number ONE pet peeve...(now there's an expression you never hear anymore)  are the agents you BUY listings under the guise that the "Selers made you do it"....nope !

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) 12 months ago

Congratulations on your feature recognition. This is an important topic.

Posted by Roy Kelley (Realty Group Referrals) 12 months ago

I'm so glad that Gabe Sanders re-blogged you post as I missed it! Excellent post because we do have an obligation to be ethical and honest and we are not when we mislead sellers on pricing. I love your analogy..no one pays top dollar for stale bread..just like no one wants to pay for an overpriced listing sitting on the market.

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) 10 months ago

Totally agreed, @Amanda.  And you have some great points here that should make a seller reconsider going with the highest offer.

Posted by Lise Howe, Assoc. Broker and Attorney Licensed in DC, MD, VA, (Keller Williams Capital Properties) 21 days ago

Lise Howe seems like the same thing is happening again this year. Low inventory makes things interesting =)

Posted by Amanda S. Davidson, Alexandria Virginia Homes For Sale (Amanda Davidson Real Estate Group) 21 days ago

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