Realtors Play Musical Chairs for Sellers

By
Real Estate Agent with Sequim & Port Angeles Real Estate

One of the popular games in Clallam County as well as around the country right now is called, "Musical Chairs With Realtors." It's a game that some sellers of homes and land are playing without realizing the tragic consequences of losing. Here's how the game works.

An owner of either a home or vacant land hires a real estate agent to list and sell the property. The agent wants to list the property at a sellable price, of course, because the agent only earns a commission if he actually sells the property. The seller is a strong personality. The seller tell the agent what the property should sell for. The seller asks the agent his opinion, but everyone in the room knows the seller isn't really asking: the seller is telling.

An agent often cannot be certain the seller is wrong, because pricing property is not some kind of mathematical science. It is partly objective, partly subjective, and timing is everything for the right buyer at the right time and place. Often an agent is persuaded that a seller's property could be listed at a price the seller is quite adamant about. Who knows, the seller could be right. There are not any recent sales of anything exactly like this home or lot, so it is hard to definitively prove anything to a seller that will persuade him to reduce the initial listing price. But in so many cases, this agent can testify, as can many other agents, that sellers send strong messages that they are not to be challenged on the price. There are many ways sellers send this message, and those of us in the business know only too well how this works.

An agent doesn't want to be rude or offensive, and without specific mathematical proof that the listing price should be lower, it is hard to say anything real intelligent or persuasive to a passionate owner who justifies every which way up one side and down the other why this property should sell at such and such a price. Sometimes it is just impossible to argue otherwise. Any agent worth his salt knows that if he argues with his client, he loses. We don't argue with our clients. It would be bad form and unproductive.

So the agent lists the property, but after so many months, usually three to six months, the owner has decided it's the agent's fault it hasn't sold, and it's time to try an agent that can sell it. Granted, some sellers don't blame the agent, but still the result is the same in that they hire another agent. (Honestly, even though a seller may say he doesn't blame the agent, he really does, or he wouldn't be listing with another agent.)

And the game of Musical Chairs With Realtors begins. The first agent notices that the new listing price with the second agent is way below the price the seller insisted he list it at. What does the agent think? The agent is thinking, "Wow! Why didn't my client list it with me at that price. I might have been able to sell it." This is an entirely legitimate question. To this some sellers would immediately reply, "Well, why didn't you tell me it had to be listed at this lower price. I would have reduced it and you would still have it listed." Not. Experienced agents try to tell sellers a hundred times that the price may be too high, but many sellers simply refuse to hear it in all the conversations. They don't want to hear it, and they direct the conversation to justifying the price each time.

But it gets better! Wait, there's more, to parrot the famous commercial.

The second listing agent is soon to be replaced by a third listing agent, only this time at an even lower price. Oh, this game of musical chairs is such a fun game for all of us. Who benefits? No one.

The seller is making the job of selling his properties hard for everyone, and he is sabotaging his own goal of getting the properties sold. The seller is also disrespecting every agent he hires and then dumps. And worse, with his property on the market so long, he has made his own property less desirable to buyers who no longer see it, even when he keeps reducing the price.

There may be an occasion when it is appropriate to change agents. Agents come in all different sizes and shapes, so to speak, and education, experience, competence, trustworthiness, and professionalism all play an important part to the discerning seller. (Note the word "discerning.") A seller might find out that his agent is not good at marketing and sales, and with some due diligence find an agent who is. But in the vast majority of cases from my experience, most sellers are playing musical chairs, rather than doing some deep investigation to find out who is the best.

This game of musical chairs is played all the time, every week in Clallam County and around the country. Not all sellers are playing this game. How many are or what percentage are playing is hard to say, but a substantial percentage are playing. It's too bad, too, because everyone loses when this game is played, and in this market who can afford to be a loser.

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Rainmaker
292,255
Kevin Kenagy
Premiere Property Group, LLC - Salem, OR
Moving you in the right direction.

I do hear that from time to time from Realtors i work with. Great post.

Jul 28, 2009 09:09 AM #1
Rainmaker
49,269
Judy Bracken-Commissaris
Keller Williams Western Realty - Bellingham, WA
Broker/Owner Keller Williams Western Realty

You are correct that this hurts the Seller more than anyone.  And they go away with a  preception that all Realtors don't know what they are doing.

Jul 28, 2009 09:37 AM #2
Rainmaker
244,734
Bonnie Vaughan
Scranton, PA
CNE SFR - Buyers/Sellers - Lackawanna & Surroundin

Chuck, You have hit upon one of my pet peeves.  As a matter of fact I posted a situation I had encountered just minutes before I read your post.

The problem is not with the sellers. It's with us.  There is always an Agent #1 willing to take the listing no matter what.  We do not stand united like other professions do. 

Agent #1 needed to do his research and show the seller how the price he suggested was arrived at.  Like Joe Friday said, "The facts, just the facts".  The seller may not be happy but the agent is being honest.

The seller will interview another agent because he did not like the answer from #1.  If agent #2 and #3 and #4 all show him the same black and white within the same price range what will the seller do?

If there was consistency between agents in a marketing area we would not have to deal with these problems.  But alas, there is always an Agent #1.

Jul 28, 2009 10:00 AM #3
Rainmaker
76,710
Chuck Marunde
Sequim & Port Angeles Real Estate - Sequim, WA
Sequim Real Estate Broker

Bonnie, I agree with you totally, but there are actually circumstances in which you as Agent #1 cannot prove or even be certain that the listing price should be lower.  It's easy with a 3br, 2 bath that has 100's of comps, but not all land or all houses have such easy comps.  Yet, the same scenario follows.  The seller in this scenario does not seem to be motivated (by enough pain) to lower the price substantially with Agent #1, but by the time he hires Agent #2 he has decided himself to lower it, and he tells Agent #2 what he wants to lower it to.  I've seen this scenario a number of times.  And these agents are not wimps either.  Some sellers are very very strong personalities, and they lay down the law all the way to the end.

Jul 28, 2009 12:16 PM #4
Rainer
288,231
Leslie Helm
Tennessee Recreational Properties - Jamestown, TN
Real Estate For Trail Riders

This post hits the nail on the head! I have been Agent #1 and I have been told by the seller what the property will be listed for, based largely on how much they "want to walk away with." I lost the listing because I "did not show it enough." Agent # 2 listed it for...yup, a lower price...but they were from well out of the area and did not show it much, if at all. It's even less now, as a FSBO, but it is well and truly shopworn. If it had been priced right to start with, it would probably be long gone.

Aug 13, 2009 07:24 AM #5
Rainer
478,183
Not a real person
San Diego, CA

Here in San Diego County I think the brokers are partially to blame. Many brokers provide some pretty good perks for the top listing agent, notwithstanding whether or not they sell any of their listings. That simply results in agents buying the listing, because if they are only working part-time, or if their spouse is a doctor or attorney, they don't really need to sell those listings. They just need to make enough money to make themselves feel good, and sometimes getting a nice monthly bonus for being the top listing agent, as well as one's name on the prime parking spot outside as the top listing agent, is all it takes. Too many brokers and Realtors have made buying and selling real estate into a game, and then the banks didn't help matters any buy jumping in the game with all sorts of good financing incentives.

Aug 30, 2009 06:02 PM #6
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Rainmaker
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Chuck Marunde

Sequim Real Estate Broker
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