Sometimes, when a homeowner chooses to put his home up for sale, he will wisely consult with many different REALTORs® to find out which one is the best fit for marketing his home.
During the consultation process, pricing will be a major topic of discussion.
If Agent A suggests an asking price of X, and Agent B suggests a list price tens of thousands higher, ask each agent to go over his research before making a snap decision to list with Agent B, for he could be engaging in a practice we refer to as "buying the listing".
Buying the listing is the disreputable practice of enticing a potential client with an asking price--which has no chance of being met by a qualified buyer--in order to secure the listing.
You may ask:
Since real estate agents aren't paid unless the home sells, why pursue a listing at a price that will not sell?
The answer is simple: free advertising. The yard sign--especially in high traffic areas and highly desirable neighborhoods--is incredible free advertising for an agent. Also, most buyers and sellers find their agent in the process of looking for a home--that is, they seek homes (LISTINGS!), not agents. Having an over-priced home in REALTOR.COM is excellent advertising for the listing agent, but it will not get the home a full-price offer.
So, before blindly listing with the agent who promises the most money, ask each agent to explain how he arrived at the suggested asking price, and make sure that the comparables used to price your home are actually comparable.
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