Are YOU Lying to Your Sellers?

By
Real Estate Agent with Solutions Real Estate CA DRE #01490977

Are You Lying to your Sellers?

You have to wonder if some agents are lying to their sellers. We suspect they may be in certain cases from the stories we hear about proposed listing prices. 

High list price does NOT equal moneyWho hasn't lost out on a listing because another agent told the sellers they could get $X for their home, when none of the market data and conditions support that contention? We all know what happens then - the home sits there, month after month, with multiple price reductions. And no offers. And then it gets relisted with another agent. Or it finally sells for well below where it likely would have, had the sellers not been lied to. 

Granted, some homeowners may believe their homes are worth more than the market will bear. They don't have to worry about being lied to. They are lying to themselves already. But that's a different issue. 

So, are YOU lying to your sellers?

There are some good reasons to be honest with your sellers about listing price. 

YOUR REPUTATION

Agents can get a reputation for over-pricing their listings. We know who they are because they don't sell as many, or a larger percentage of their listings don't sell. Wouldn't you rather be able to tell your clients that 100% of your listings sell, as opposed to only 50%? And if the price is right the differential between asking and selling price will likely be smaller, so on average your SP/LP ratio may be more than 95% (and perhaps better than the average in the MLS

TIME

This will likely be well spent if you are honest about the pricing, and the sellers listen. Who wants to hold open houses, call for feedback, and spend time marketing a home that is not going to sell because of pricing. 

FINANCIAL

Lying to the homeowners about the list price will cost you in wasted advertising and marketing dollars. Oh, perhaps you don't do any of that stuff. Is that another lie? And you, and the sellers, don't get a pay day if the home doesn't sell. A high list price does NOT equal $$$$$!

ETHICS

N.A.R.Logo

MISREPRESENTING the value of a home violates the CODE OF ETHICS (check out Article 1 and Standard of Practice 1-3 "REALTORS, in attempting to secure a listing, shall not deliberately mislead the owner as to market value."). So you are not a REALTOR - it's still wrong to lie. Sure you could say that you REALLY believe the home IS worth that much, but you know yourself, deep down, when you are misrepresenting based on the market. 

All this said, I think many agents are as honest and forthright with potential sellers as they can be.

And we hear stories of those who walk away from listings rather than take them because the sellers are lying to themselves about what the home is really worth despite evidence to the contrary. And certainly pricing a home in this market can be a challenge.

Why lie to your sellers and waste time and money?

 

All content copyright © 2009 Jeff Dowler "The California Relocation Dude" Carlsbad Homes and Real Estate Tidbits

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. D B 12/30/2009 02:40 PM
  2. Charles McDonald 12/31/2009 12:31 AM
  3. Charles McDonald 12/31/2009 12:34 AM
  4. Charles Stallions Real Estate Services 01/04/2010 01:42 PM
Topic:
Real Estate Sales and Marketing
Groups:
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Southern California Real Estate Forum
SAN DIEGO Real Estate Agents & Loan Officers
San Diego Realtors®
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Rainmaker
1,431,210
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I have lost listings to agents who have "outbid" me on the listing price, but I have never seen them close at those prices.

Jan 01, 2010 04:22 AM #99
Rainmaker
135,274
Jackie Cross
Real Living All Florida Realty - Port St Lucie, FL

I have lost many a listing due to the fact that the seller won't reduce to meet the falling market.  Come renewal time if they still won't reduce I let them go.

Jan 01, 2010 04:51 AM #100
Rainmaker
272,833
Carrie Sampron
Home Smart Realty Group - Highlands Ranch, CO
ABR SFR & Kathy Sampron (303) 931-3629 Highlands R

Jeff:  What a great reminder, but I fear this unethical practice will continue.  It is up to each and everyone of us to determine how we want to run our business and whether we wish to be ethical real estate professionals or not.

Jan 01, 2010 08:18 AM #101
Rainer
26,418
Denise Tower
Coldwell Banker Gundaker - Maryland Heights, MO
Your Neighborhood Realtor
Jeff, I was hoping to NOT get a listing that was expired and significantly overpriced. I even said "no thank you" BEFORE they called my broker and insisted that I be their listing agent. I have them on an aggressive marketing plan (read dramatic price adjustment after 10 days) and hope when (IF) an offer comes through the appraisal sets the record straight. I really despise overpriced listings since they create a false market perspective for potential sellers.
Jan 01, 2010 08:37 AM #102
Rainmaker
47,876
Roshan Quigley
Weichert Realtors - Manalapan/Marlboro, NJ - Manalapan, NJ
We can show, show, show our clients the data and explain to them again and again that NO ONE will purchase an overpriced home.
Jan 01, 2010 10:12 AM #103
Rainmaker
1,079,379
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Floyd Wickman tells it like this:

"It's better to be the first born, the second wife, and the third listing agent."

 

Jan 01, 2010 01:39 PM #104
Ambassador
3,987,115
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

John - sadly, that's true.

Tammie - I think agents who operate by telling sellers what they think the sellers want to hear are not considering the long term impact of their actions. Getting the listing does you (and the sellers) little good if it does not sell.

Andrew  - what do you decide is reasonable? What happens if the sellers are chaisng the market down?

Sherry - seems like you are in agreement with lots of others here.

April - it is hard to understand if we are all looking at the same comps.

Gail - well said. I think the job of education has become even more complicated and critical in today's market.

William - ha ha. But I agree - this is NOT to imply that MANY agents operate this way. But teh few who do are not helping the market, or our reputation as agents.

Jeff

Jan 01, 2010 03:20 PM #105
Rainmaker
645,842
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

Great points Jeff!  I would rather be honest and keep my integrety in the long run.  A long time realtor friend of mine taught me that it is better to turn a seller down than let them down.

 

Jan 01, 2010 03:47 PM #106
Rainmaker
273,520
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

I've lost more than a few listings to agents who promise the moon. I just tell it like it is.

Jan 01, 2010 05:46 PM #107
Rainer
69,144
Sue Wettstein Brazzel & Dipper Wettstein
Howard County, MD - RE/MAX 100 - Columbia MD - Columbia, MD
"Fast, Efficient, Hassle-Free Service!"

Jeff,

I often feel that bad advice from Realtors is  not actually "lying" or an attempt to deceive ... it's often inexperienced, ill-informed, unprepared Realtors posing as experienced, knowledgeable Professionals.  Of course, there are always those who tell the sellers what they WANT to hear in order to "buy" the listing, but often it's just incompetence.

Jan 01, 2010 11:07 PM #108
Rainmaker
262,371
Angela Lawrence
Noble Merit Real Estate Services - Winston-Salem, NC
Broker/Owner

We know agents that lie all the time to get the listing, we on the other hand, tell it like it is....its a buyer market and your competing with foreclosures, if you want the house to sell, you must be flexible.  Bottom line!

Jan 02, 2010 01:21 AM #109
Rainmaker
262,371
Angela Lawrence
Noble Merit Real Estate Services - Winston-Salem, NC
Broker/Owner

We know agents that lie all the time to get the listing, we on the other hand, tell it like it is....its a buyer market and your competing with foreclosures, if you want the house to sell, you must be flexible.  Bottom line!

Jan 02, 2010 01:21 AM #110
Rainer
117,860
Beverly Femia
BlueCoast Realty Corporation - Hampstead, NC
Broker Realtor Stager - Greater Wilmington, NC Are
In order to accurately price, it's also necessary to be well informed about your market. I find agents take pricing averages from local neighborhoods without a clue how differences between neighborhoods and even locations within neighborhoods will greatly effect individual properties. With Seller's already "lying" to themselves, it's easy to understand how an ill-informed agent with credible but not astute information ends up with the overpriced listing. Once it's out there, those of us who truly understand our market are shaking our heads. Overpriced home - falling market - makes absolutely no sense!
Jan 02, 2010 10:03 AM #111
Rainer
117,648
Beverly of Bev & Bob Meaux
Keller Williams Suburban Realty - West Orange, NJ
Where Buying & Selling Works

Jeff, talking about sellers lying to themselves. I went in the other day to a listing to say we have to lower or quit. We suggested maybe get the house appraised to verify our thought that the house wouldn't appraise. He had the audacity to say that he did that recently and the appraiser said $540K, which is what I had been saying, but he still wants to be at $575K. I gave up and pulled out the withdrawal form.

Jan 02, 2010 01:01 PM #112
Ambassador
3,987,115
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Christine - that's a good approach. Something many of us do.

Frank - To overreach the range for the sake of satisfying a seller or by pumping up the value to the seller is a waste of everyone's time. So well said.

Sue - no arguments from me on that.

Wendy - yes, indeed, the truth catches us, and eveyone loses.

Terrylynn - and that seems to me to be a huge risk in this market.

Jeff

Jan 02, 2010 03:20 PM #113
Rainer
11,900
Neal Greene
Avery-Hess, REALTORS - Sterling, VA

I had a listing (Freddie Mac) that I thought was overpriced. Of course Freddie Mac would have reduced the price had it not sold. I got an offer in 5 days, above list price, and it appraised. It was a "cookie cutter" townhouse and I still don't know how or what comps the appraiser used, but the buyer got the house he wanted, the seller got rid of a house it obviously didn't want and both the selling agent and I got paid. I still try to get my sellers to list at market value and I am not advocating taking overpriced listings, but sometimes things happen that don't make sense and you just go with it!

Jan 02, 2010 03:45 PM #114
Rainer
60,671
Bill Buettner
Keller Williams Greater Columbus - New Albany, OH
Your Real Estate Connection
If you do not lie about the value, you will not have the problem of overpriced listings. I'd rather walkout doing the "Told ya so" dance.
Jan 04, 2010 12:17 AM #115
Rainer
17,001
Teri Short
Emerald Isle, NC

Jeff,

I remember turning down a Staging job because the seller would not perform some badly needed home improvements. He just wanted me to bring in furniture, and I just couldn't do it. So I don't lie either as a Stager. It seems to me that there are Realtors out there who are not entirely truthful about the condition of the seller's home and how much better it could look, and include Staging to spruce up.

As a Stager I am politely honest about what could be done around the house to make a home for sale stand out above the crowd.

BTW, my husband may be transferring to Camp Pendleton this summer. How about coffee and a talk about Staging sometime?

 

Jan 04, 2010 01:54 AM #116
Rainmaker
1,607,599
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

Let's hope not, but I am sure this is done a lot. Why I don't know because it always catches up with them.

Jan 04, 2010 01:44 PM #117
Rainmaker
561,841
Roy Giordano - Top Real Estate Expert
RE/MAX Central, Marlboro, Manalapan, Freehold, Old Bridge NJ - Marlboro, NJ
Top Agent Marlboro NJ, Marlboro/Manalapan Homes

Hi Jeff, Excellent blog. Great information and a catchy title.

Always enjoy reading your blogs.

Thanks for posting.

Roy

Jan 10, 2010 02:27 PM #118
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