Home Sellers Can't Handle The Truth

By
Real Estate Agent with Majestic Properties 3061802

jack_says.jpg

If you are in the market to sell your Miami home, how do you interview Realtors? What questions do you ask and ultimately, what’s the most important factor when choosing a Realtor?

When we asked random people what qualities are important when choosing a Miami Realtor, the response was: Ethical, Loyal, Truthful, Professional, Aggressive, and Experienced.

But when we ask home sellers how they choose their Realtor, it comes down to one single factor: PRICE.

Here are different scenarios we wanted to present. In the 3 scenarios, sellers interview 3 well known Realtors in their area who appear in local advertising and seem to have a wide array of listings.

FIRST SCENARIO

  • Agent 1 tells them the truth about the miami real estate market and how they will sell the home for a lot less than they had planned.
  • Agent 2 tells them they will list the property at whatever price they think is right and will recommend reductions as time progresses.
  • Agent 3 tells the buyers that they can get $200,000 more than what Agent 1 said.

What surprises us is that 9 times out of 10, the sellers will choose agent number 3 – even if that agent is not being realistic, even if that agent will NEVER achieve their goal. The house ends up sitting on the market for months, it may have a couple of contracts that fall apart because the house simply will not appraise, and the house will end up selling bellow Agent 1’s price.

We have seen this happen so many times that we just roll our eyes and cannot believe that people can be that naïve. We realize that being ethical and truthful is not important to a lot of sellers.

SECOND SCENARIO

  • Agent 1 tells them that they should offer a higher commission to cooperating agents to have more exposure and a better chance of selling.
  • Agent 2 says commission makes no difference and they should list at the standard.
  • Agent 3 explains how they have tons of buyers, they only show their own listings and if they sell the property themselves, they will give a major discount on the commission.

Again, 9 out of 10 times, sellers will choose Agent 3. What they don’t realize is that because agent 3 only pushes their listings, other agents are not interested in showing Agent 3’s listings. Because Agent 3 is committed to making both sides of the deal, he is representing neither the seller’s nor the buyer’s best interest, but is only interested in the mighty dollar and volume sales. Those sellers will reduce the chances of selling their house in a buyer’s market, because they are limiting their market.

Because PRICE is once again at the top of the “qualifications list”, sellers fail to see the negative aspect of listing with Agent 3.

THIRD SCENARIO

  • Agent 1 explains that over 85% of buyers start their search in the Internet and it is important to Google the Realtor’s name to see their search ranking.
  • Agent 2 sees no advantage in on-line advertising because real estate is “local”.
  • Agent 3 is in every local publication possible, his face appears in the local chamber of commerce, has a beautiful magazine ad, appears in the local paper and promises that the listing will appear in all those print-ads and local publications…….he has no Internet presence.

9 out of 10 times, sellers will again choose agent 3. Did you know that all those local print ads are good for getting listings? A study was done by the National Association of Realtors that local print ads and publications are recommended because they “expose” the Realtor…..not the listing…….it helps REALTORS!

Take off the blind fold!

So there you have it– a listing agent chosen because he suggests the highest price (not being truthful), he pushes his own listings to his buyers and reduces commission and on top of that produces beautiful print ads that don’t sell listings.

We are seeing buyers educating themselves on the real estate market, on advertising, on local trends. We see buyers going in depth when choosing an agent to represent their best interest, so why aren’t sellers doing the same thing?

If you are a seller, do your homework, check your options, and don’t fall in the PRICE trap. We ALL want to get the most money possible in the least amount of time (that’s a no brainer). Google the Realtor, see what their Internet Presence is like, ask particular questions on marketing your individual property. Ask about latest advertising tools like video and blogging, how many different tools do they use? Make sure your interests are well represented.

You want the truth?....you can't handle the truth!

contact Team Miamism Search the MLS

**article also appears in www.Miamism.com**

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Rainer
236,433
Susie Roscoe
Signature Realty Associates - Brandon, FL
Real Estate Specialist | Brandon, FL
Ines - this post ROCKS!!  How true, how accurate, and how SAD that it's come to this.  I've lost listings to other agents (who mislead) and it really irritated me but I realized in the end I was honest and professional and if the "BS" is what was selling to these particular sellers...maybe I was better off without the listing!! 
Nov 04, 2007 08:46 PM #20
Rainer
71,052
Thomas Weiss
Thomas R. Weiss - West Palm Beach, FL

Ines,

Great Post! and Sadly true. Sellers need to wake up and deal with Reality..

Tom Weiss

Nov 04, 2007 09:28 PM #21
Rainmaker
594,298
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Ines,

Some do and some don't. I think if you did a survey the ones who don't want to hear it is probably higher...just go look at the three combined counties of Dade ,Broward ,and Palm Beach....over 100,000 properties for sale...how many are probably unsellable right now?:)

Nov 04, 2007 10:38 PM #22
Rainmaker
223,300
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL

Jennifer - wouldn't it be great if there was an "ear-tickler-alarm"??  It would go off like a siren when Realtors started misleading their customers!  : )

Aziz - anything with a chocolate brownie - or Epicure's blackout cake...hmmmm.

Susie - bottom line is that we sleep at night.  We always end up being right at the end, and they end up loosing some money, time and aggravation, but it is what it is.

Tom - A lot don't want to deal with Reality, but I'm glad that there is a changing trend.

Neal - Don't get me started on the three counties.  First we need to have agents remove those houses that are pending that are still showing as active - I estimate that to me 25% of the listings (sad but true).  Then you can estimate another 25% that don't want to sell.  Then the numbers begin being more normal.

Nov 04, 2007 10:53 PM #23
Rainmaker
582,913
Dena Stevens Coriz
Rocky Mountain Realty - Canon City, CO
Putting The Real Into Realtor Since 2004

Ines, with your permission I sent this to some of my buyers. An immediate response came back.

It's been my experience that home 'sellers' have an emotional attachment to the home and place monetary value to it based on emotion, not actual value/appraisal, etc.  In other words, it's their HOME not just a HOUSE.  I know because I've been both buyer and seller.  I have a home here that value based on our emotional value and all is worth $300K;  if I tried to sell it now based on actual appraisal and market value, I'd be lucky to get $225K or lower.  Home sales are down and falling each month.  Foreclosures are up and continuing to rise each month.  Building here already funded is continuing but many projects have stopped and no new ones are being started.  I may be wrong but I anticipate a real buyers market soon and of course, I'm hopeful to be able to find the land I want or perhaps the land with home.  Mark

Nov 05, 2007 02:25 AM #24
Rainmaker
223,300
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL

Dena - thanks for sharing the article and what a great response.

I do think we can expand a bit on the expectations of buyers as opposed to those of sellers right now.  Miami is a full-blown buyer's market - the competition is fierce and even in those areas that are strong, sellers better be willing to negotiate and be flexible.  Buyers on the other hand want a deal (who doesn't), with the help of a good Realtor, both parties can have a successful transaction where everybody wins.

I refuse to spin my wheels with a listing that not only makes me look bad, but ultimately hurts my reputation as well as does a disservice to my sellers. 

Please thank Mark for his thoughtful response.

Nov 05, 2007 03:55 AM #25
Rainer
10,721
Nestor N. Romero
HomesByNestor - Norwalk, CT
Realtor - Real Estate Fairfield County - (203)515-5511

Thanks Ines for such a detailed and complete analysis. How can we make it visible in Localism as a featured article?

I think clients, especially sellers, don't always trust real estate agents based on what they hear about unethical agents who damage our reputation, and as Jennifer mentioned, sellers choose what they want to hear, but your conclusions and analysis is a great way to educate our clients and customers.

If clients start reading this type of analysis, they will probably make a more educated decision.

Unfortunately there are many companies and websites offering reduced fees. What clients don't know is that they will also get reduced services, but those other sources of information are telling what many clients want to hear.

You should send your analysis to NAR.

Felicitaciones y Gracias!

 

 

Nov 05, 2007 07:03 AM #26
Rainmaker
453,080
LLoyd Nichols
Premier Florida Realty of SWFL - Fort Myers, FL
Southwest Florida Homes By The Sea
Interesting post Ines, In the scenario #1 and when sellers choose Agent #3 you show very clearly one of the reasons why the inventory is growing and sales are dropping."You can't handle the truth!"
Nov 05, 2007 02:10 PM #27
Rainmaker
223,300
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL

Nestor - Gracias a ti!  I do believe that there is room for all kinds of real estate models in this market, but that discussion would go on a different post.  There are plenty of unethical agents out there, the ones concerned only with their well-being and their bottom line.  It's up to us to expose them and make people realize that it's not their best interest.

Lloyd - I totally agree - at least 30% of the local inventory in my area is overpriced listings.....how can that be in a buyer's market.  I had an agent tell me the other day that there were no comps......WHAT??!!  It really cleared up why most of her listings are overpriced.

Nov 05, 2007 02:31 PM #28
Rainmaker
895,821
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT
Ines - Very timely post!  I know the market in Miami is even tougher than the market in my area.  A Seller told me that he wanted to go with the agent who told him what he wanted to hear, but that if that agent didn't sell the home, then he would list it with me.  I told that his home was less attractive to me from a listings standpoint after it had been on the market for six months.  It took a lot of time, effort, and marketing dollars to get to the point where I'm the #1 listing agent in my market.  Why would I take on a client who didn't believe in me to begin with?
Nov 05, 2007 03:48 PM #29
Rainmaker
223,300
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL

Gail - you are spot on.  But we have to understand that it's not easy for a seller.  When they are in the middle of the process and they are focused on money, picking a Realtor and realizing that they are being taken advantage of is difficult to swallow.

There are not many "Gail Robinsons" out there and hopefully they will hire you and work for you because of your ethics.

Nov 06, 2007 12:26 AM #30
Rainmaker
895,821
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT
Ines - It takes a lot of time and money to market a property properly in a Buyer's Market.  I hope Sellers read your post and take it to heart.  You've given good advice.
Nov 06, 2007 12:48 AM #31
Rainer
62,624
Nick M.
Certified Residential Appraiser- West Palm Beach Real Estate - West Palm Beach, FL
Realtor-Appraiser in West Palm-South Florida Real Estate Appraiser

Hi Ines, very well said. I love how you laid the scenarios out!  Bravo!!  Sellers are just unrealistic because they are skewed by their opinions, wants and desires. Open your eyes people!! I mean, what do we know?? We do this all day long, everyday! oh and I've been valuating homes for several years and got my license in a cracker jack box. Hey you got one too!! NOT!!

Time always reveals the truth. All we can do it give it to them straight and wish them the best. It is tempting to give them the 'I told you so' after 400 days on the market.. but heh.. it is what it is..

Greed has been around for a while... rather than play to it with unrealistic expectations, raise the commission to appeal to the Greed in the buyer's agent.

This post rocked it!!  love the "You can't handle the truuuth!!!" :)

Nov 09, 2007 12:58 AM #32
Rainmaker
223,300
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL

Nick-Nack - what I find interesting is most sellers' perception of what they want from a Realtor.  They THINK they want honesty and ethics, but it is not usually what they pick.

Rick and I have watched that video over and over - I wanted to trim it down to the part that says "you want the truth?.....YOU CAN't handle the truth!!!" - it's a CLASSIC!!

Happy belated birthday btw! : )

Nov 09, 2007 02:20 AM #33
Rainmaker
595,547
Lisa Hill
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate
This is such an awesome post! The truth hurts, but I really hope sellers will take this to heart. They should appreciate it that an agent is being honest with them. That is the agent who will sell their house!
Nov 09, 2007 07:22 AM #34
Rainmaker
223,300
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL
thanks Lisa - a lot of sellers are being smart about the marketing strategy, but others are still dreaming.  Unfortunately, there is not much we can do about that.....just pick up the pieces after their property doesn't sell.
Nov 09, 2007 07:29 AM #35
Rainer
292,562
Diane Aurit
LKN Realty, LLC - Mooresville, NC
Lake Norman Real Estate
I'm so glad I found this while reading about awnings.  This couldn't be more true of our current market here too.  As a result, I am focusing on buyers (I didn't think I'd ever say that again!).  I think I may link to this in a future post for my area sellers.  Maybe they will listen to someone from a different area.
Nov 10, 2007 01:52 AM #36
Rainmaker
223,300
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL
Hi Diane - It's definitely helpful to give others' perspectives to reinforce our points.  We can't all be crazy! : )  I also have this same article at miamism.com btw
Nov 10, 2007 03:03 AM #37
Rainmaker
340,564
Ann Cummings
RE/MAX Shoreline - NH and Maine - Portsmouth, NH
Portsmouth NH Real Estate Preferrable Agent

Hi Ines - somehow I missed this post.  You tell the truth, the whole truth and NOTHING BUT THE TRUTH!!  I see sellers here who do the same thing, and I just shake my head and wonder WHY..... so sad because it then costs them not only time on the market but all that money that they thought they were going to get.

GREAT post for sellers.......their agents need to read this, too.

Ann

Nov 11, 2007 10:12 AM #38
Rainmaker
223,300
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL
Holy Cow Ann - and I don't know how I missed your comment!  I know YOU can definitely handle the truth! : )
Nov 19, 2007 04:44 AM #39
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