Reader Question: We are going to be listing our home soon to take advantage of the spring market. We will be taking your recommendation and interviewing multiple agents, and we expect they will each have a strong listing presentation. Do you have any specific comments for us that may help us spot gimmicks or questionable practices?
Monty’s Answer: Real estate agents spend time and money to get in front of good potential customers. You are correct that many will have a convincing listing presentation. While there are many good agents, choosing one is not easy. Real estate agents, like sales people in other industries, have been well trained to convert a presentation into a client. What makes your choice difficult is that a good listing presentation and a pleasing personality does not necessarily translate to an effective representative. As independent contractors, some agents will improvise, take shortcuts, or add duplicities to “ convert ” prospects.
The examples below are not an entire list. There are also incompetent, but sincere agents (genuine, but incompetent agents are among the most difficult to spot). Here are some triggers to watch for:
1) Pricing practices
A). Accepts your asking price without any pushback when their range of value conclusions is lower.
B). Does not provide you with a document that demonstrates the calculations they used to arrive at their value conclusions.
C). Employs online third party estimates to establish value instead of direct MLS data sheets. The essence of the reliance on third parties is sacrificing accuracy for you to conserve their time and disguise a lack of knowledge.
2) “ I may have a buyer. “
Typical because the suggestion plays on a home seller’s greatest need and it is easy to later dismiss with “They bought a different home.” To be fair, it can also be that agent believes they have a buyer. Agents know in the vast majority of MLS real estate transactions the buyer is not delivered by the listing agent.
3) “ We place your home on hundreds of websites.”
Website exposure is overstated. I consider it puffery. The local MLS is the only accurate and current source of data, and most every buyer ultimately discovers this fact. As a sidebar, if you ask that agent for a list of all these websites, it is likely they cannot deliver it.
4) “ Coming soon ” strategy
Coming soon is a new pitch that serves multiple purposes for the agent. These listing are not reported to the MLS so the chance of a two-sided transaction increase. It also sidesteps the online websites such as Realtor.com and Zillow, which many agents believe creates extra work for them. The agent will position it as the first step in a potential bidding war, which could be true in some sizzling markets, but the seller would get wider exposure if it were in the MLS.
5) “ If I find the buyer, I will negotiate my fee.”
A similar pitch to number two above. The agent knows it is highly unlikely this will happen, so the odds having to deliver on the promise is low. It plays into another myth that many sellers believe: the listing agent will produce the buyer,
6) Wear you down to close the sale
This tactic is so blatant, it is subtle. The idea is to stay and keep talking until the sellers agree to sign up, just to get rid of them. While this sounds like a story from the distant past, there are home sellers that will succumb to it.
7) No definitive action plan
No plan is not a tactic, but rather the lack of tactics. When the focus of the presentation is the agent, but it lacks a quality demonstration of the home’s range of value, and a very specific action plan as to what this agent is going to do to promote the home, it is a big red flag. Some real estate agents believe sticking a sign in the yard and waiting for the MLS to produce a buyer is the way to go. Not!
8) “ I am the top producer in the MLS.”
Any “ top producer ” statements without unfiltered MLS data to confirm the production record are a risk. They may be taking advantage of the “top producer” myth. While high production may be a good attribute, it is not necessarily so. Is the production from referrals, or is it from promotions? Reviewing an unfiltered MLS generated production report, that every agent has, is an insightful document.