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I have been selling houses for 20 years and in a relatively equal market (not a super hot buyer or seller market) I can almost always tell when a seller determines the price. The big problem with this is that there are no winners. Not the agent. Not the seller. Not the potential buyer who may have missed out on their perfect home.
There are three big reasons why a seller sets the price. Neither reflect well on the agent. The first is because the seller has a dominant personality and the agent is too afraid of them to give them a sales price they don’t think the seller wants to hear. Another reason is because the agent can’t justify their price to the seller so they end up letting the seller choose the price. This is either because they rushed while doing their comp research and were not prepared (shame on them) or they have not been taught how to do comps (shame on their brokerage). Finally, an agent will intentionally tell the seller their house is worth whatever they want to hear just to get the listing. This is another shame on the agent tactic. Let’s discuss all three below.
Fear of the Seller:
The ability to face rather than avoid conflict is not a gift that every real estate agent has. So if they face a seller that is overbearing, a know-it-all, or just a jerk in general, intimidation can easily set in. If one doesn’t learn to handle conflict, they don’t have the skills to tell a seller why the house won’t sell at the price they want. This means that the house isn’t priced correctly so it can sell. And, no shock here, it doesn’t sell.
Cannot do comps:
Some agents handle conflict well but they don’t know how to price a house. Doing comps is, unfortunately, not taught well (if at all) in classes required to get a real estate license. If an agent isn’t trained by the brokerage they choose to associate with, they are thrown into a very important arena (pricing homes) that they know nothing about. And let’s be honest, most companies that say they train really don’t.
If a brokerage does do training, it is still in the agent’s hands to practice what they have learned. If they choose to skip steps or “guess” (and yes, I’ve met agents who do that), they go into a listing appointment unprepared. If a seller asks them good questions that a well prepared agent would know, this agent will buckle under the question, scramble for a response and ultimately the seller picks the price. Most times, however, the seller doesn’t want to price their home. They want the agent input and if the agent can support that with comps, this leaves this type of seller content with the suggested list price. This untrained agent, often with good intentions and fear that the seller might leave money on the table, will let the seller set the price. And the house doesn’t sell.
Whatever it takes to get the listing:
This final group is ethically bankrupt. They know that the seller is wrong. In fact, often the seller isn’t even giving a price to the agent. The agent is just giving them a high price to make them happy. They assume that a seller will be happy to hear a higher price and will list with them, allowing them to beat out the competition. These scummy agents know that they will inflate the price with the listing, and then reduce it, often several times, until the house reaches the price point that it will sell. Most times, these crooked agents know exactly what that price point will be. But the poor seller is clueless. I’ve even heard of agents doing this and then later, after the house sits for a while, telling the buyers that the house is priced too high. And the house doesn’t sell.
While this tactic will often work, interestingly enough, it doesn’t always work. A number of years ago, I was in competition with 3 other agents. I got the listing. The seller told me that I could back up my number with comparables. He also said that while the other agents all came in with a higher list price, he felt like mine was more accurate and what he was thinking in his head before meeting with any of the real estate professionals. I sold the house quickly and my sellers were happy.
Now agents aren’t always right about price and sellers aren’t’ always wrong. I had a seller recently who wanted to price his house $20K higher than the comps showed. I told him all of the reasons that it was a bad idea. The house wouldn’t get showings, it would be on the market longer, and typically the longer they sit, the less they sell for. He politely insisted on his price and said that he would not hold it against me and if it didn’t sell at that price. He also said that he appreciated my help and input. We listed it at his price and within a matter of days, it sold for his full list price and successfully closed.
I called him when it went under contract and apologized. I jokingly teased him that I can’t be right all of the time. I told him that I was happy I was wrong. Then I offered him a job. There were a few differences here though. He is not a know-it-all and he has sold multiple properties with me as his agent, so we have a mutual respect for each other personally and professionally. There are times that the seller has a hunch and is right- but it doesn’t happen often.
The moral of the story is when you are looking for an agent, you should always look for one who comes prepared with comps they can show you that give an accurate value for your house. Choose someone who can explain things with the heart of a teacher and makes you comfortable so you feel free to ask questions.
If you are in SouthWest Florida, we are happy to be that agent for you. We also have many good agents that we know throughout the country and would be happy to connect you if we know a good real estate agent in your area. Feel free to contact us.
