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Bad News Bullies: The Best Agents Tell Clients What They Don't Want to Hear

By Tabitha Zesch

Real Estate Broker/Owner with Hunziker & Associates, REALTORS

January 06, 2010 08:32 AM

Telling a Seller that their house smells like one of their 4 cats had an accident (every day for the past 2 months) or that their intended list price is not recommended (clinically insane) or the family room wall they turned into a 15 x 8 foot scrap book of all their relatives, both living and dead is "really something" (to scare the Gen Y buyers away), is just part of selling real estate.

Most of us grew up being told it was rude to point out something that could hurt another person's feelings. "Niceness" is a wonderful attribute, and especially valued here in the Midwest. But, when clients are selling their most valuable investment, skirting lightly over an important issue or dropping the subject as soon as they present an ill-advised or flawed reason for making a bad decision, isn't really being kind.

My varying roles as a buyer, seller, investor, agent and office staff member have allowed me to identify one of the most important traits of a really good real estate agent; They give their full and professional assessment of a situation to their client, rather it will be easy for them to hear or not.

Obviously, being the bearer of bad news isn't a fun part of anyone's job, but sometimes it is necessary to do a good job. Effective agents have the confidence to deliver all the information that their client needs to know. They won't select only the most expensive comps for their analysis just because the client refinanced to 100% LTV a few months ago. They don't say nothing when the seller points out a broken garage door and says, "Just tell people we will fix it before closing." They don't give false hope that the out-of-date wallpaper and lack of decorating won't hurt their sale price or length of time to sell.

Ultimately, it is the Sellers' choice to accept their agents advice or not. But, if they don't have all the information they need to make a wise decision, their odds of a successful sale revert to chance or luck instead of a solid plan based on professional advice. Fortunately, I know our agents value presenting the full truth along with a spoonful of sugar to make the medicine go down. But, their real expertise is evident because they are sure to administer the full and recommended dose.

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Anonymous

Donna Anderson

In Tucson we find many agents listing homes at prices out in the stratosphere. They list the house at the price the Seller suggests. They figure, in time, the Seller will reduce. Meanwhile the Seller is chasing the market and it is worth less than it would have been, had the Seller priced it right to begin with. What annoys me the most is that many of the top agents do this and it is like they are throwing a bunch of listings on the wall and figure some will reduce and then sell. Unfair to the Seller and actually unfair to other agents who gave the Seller the honest assessment. The Sellers hear what the want; they see the agents' stellar past credentials selling umteen houses during the great past market, and the Seller lists with them because they told them that the price they wanted to list the house is fine. And people wonder why many real estate agents have a bad reputation. Honesty is the best policy. I will always give a thorough and honest evaluation and I will tell them if their house has an oder, if they need to stretch or replace their carpets, clean their windows, paint, etc, etc. And they have to price it to sell. The comps studied most closely must be homes that have closed in the past few months and not the houses that are sitting on the market for sale. I try to say it nicely....but it must be said.

Jan 07, 2010 12:08 PM

Anonymous

Elena Fort

Great point - about saying AS IS!

But do you lose listings because of that? Or you package it OK to hte seller that they can "take it"?

Elena Fort

Jan 19, 2010 01:08 AM

Anonymous

Cari Gennarelli

I agree completely with being honest with the sellers. Isn't it more damaging to take an over priced listing, especially one with "issues" and then let it sit on the market for months hoping that your sellers will allow reduction after reduction? In our unique market in Marin County we are still seeing unrealistic sellers insisting on over pricing their homes.The ones that sell typically sell for 3-10% below the listed price anyway. It does put agents in a tough position. Do you take the over priced listing or walk away? In this market, walking away is almost impossible. The questions is...How do we coach our sellers to let go of their ego's and be realistic about what their house will sell for in the current market?

Jan 19, 2010 01:37 AM

Tabitha Zesch

Hunziker & Associates, REALTORS - Ames, IA

Relocation Director

Some great tips I have heard on working with the Sellers and pricing are:

1) Be sympathetic when presenting market information, much like a doctor relaying the diagnosis of an illness accurately but with sympathy for what the person is going through. It may be bad news, but once they know the truth and the possible outcomes of ignoring the problem, you are the person that can help them.

2) Agreeing to price concessions up front at prescribed times. If you don't want to walk away from the listing, have them sign a price reduction dated 15-30 days out at the listing table.

3) Using the words "we" and "us" to convey you are on the same side and are in this together. "This market isn't doing US any favors", "WE could price it at X, but it is my job to tell you that will reduce OUR chances of selling".

Other ideas, anyone?

Jan 19, 2010 05:00 AM

Jane Sciortino

Keller Williams Realty Florida Partners - Daytona Beach, FL

I have one that I use when I show sold comps-I use a red marker and write the sold price and days on market really big across the center of the MLS printout. Then we go through them one at a time. I will also print out the gallery of photos in color so we can go through their house and compare. If they still want to list higher than the market value (but say only 5%) have them sign a rider saying that if after 30 days there are no showings or inquiries that we will drop the price to market value and not chase it. If they want to list much higher than the market value I will walk away and wish them well. I have not listed quite a few homes because of that-I truly don't believe walking away is impossible in this market. There are sellers out there that will list with you on your terms and conditions and they will be rewarded with a sale. More Realtors I believe should walk away and that would make life better for all of us. But that's not how it's happening. The seller usually finds a Realtor that will list at the price he thinks it should be and later after it sits on the market for a year the seller will not relist (because of course it didn't sell) with that Realtor. Then the seller will usually come to their senses and see that what you told them a year before was right. This is also a good time to approach them again!

Jan 19, 2010 06:51 AM

Anonymous

Pat Yoest

I have lost listings because of disagreeing with the price at which the seller wanted to list. One in particular was a seller who still had equity in his home. I ask if he knew what his home was worth he gave me a ball park figure of what his thoughts were. I asked how much he would like to sell it for. He answered with whatever it is worth? The ball park figure was at 45000 more than the house was worth and I told him. He said "please call me in the morning". The following day he did not answer his phone. I checked with the MLS and the property was listed with another agent who had listed it at the 45000 higher price. That agent has to answer when they are asked why hasn't my house sold.

Jan 20, 2010 09:30 AM

Anonymous

Pete Edwards

I've been charging my listing clients a listing retainer fee of 1/4 to 1/3 of 1 percent, refundable at closing. I can tell you that when your selling client has skin in the game it clears away a lot of the nonsense and gets them in the game of working with you to sell their property. Is anyone esle using retainer fees to list??

Jan 25, 2010 08:14 AM

Anonymous

Sharon Canada

Great advice Tabitha! And walking away from a listing that will not sell is costing you what? The marketing expenses and time, not to mention the stress of an upset seller. If it's not going to sell, you are not going to get paid. All it takes is another agent to show them that YOU are responsible for their house not selling because YOU allowed it to be priced too high.

Not every listing is perfect and not every Seller is reasonable. But we keep trying!

Be the professional! Your clients (and referrals) will thank you for it.

Jan 18, 2011 12:06 PM

Anonymous

Tabitha

Great comment, Sharon! "It's costing you what?...." So true!

Many agents can look back over a year and identify 90% of their negative and stress interactions as coming from one or two difficult sales. Eliminating an overpriced listing here and there could reduce many of those negative encounters and make selling real estate a whole lot more fun!

Jan 19, 2011 04:43 AM

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