You need more overpriced listings!
I was often told at an agency I once worked for, “you need more over-priced listings”. The theory went that if I had more over-priced listings, I would have more signs, those signs would stay up for longer and I would be more visible as an agent in that suburb, thereby attracting more sellers and getting more listings. My “problem” I was told, was that “you sell everything too quickly”.
At the time the market was bubbling along and I was selling my properties in an average of 8 days, most often after the first weekend and with strategies that were resulting in multiple offers and terrific prices for the owners. I thought that’s what I was supposed to do. If I lost a listing to another agent, which then came onto the market for a significantly higher price than I’d suggested marketing it for, I was told, “you can’t change the price of someone else’s listing” – meaning that if I didn’t over-price the property to win the listing then someone else would, and it was that someone else who would eventually received the selling fee, once they’d talked the seller into reducing the price down far enough for it to sell. In our industry this is referred to as “conditioning”. Win the listing, condition the seller, get the fee. I’ve never been very good at doing what I’m told, but that’s a story for another time!
Now, obviously I can see how over-pricing properties to win listings and having more signs would potentially benefit me, but to tell you the truth, I’ve got better things to do than hang out at dead home opens every weekend and, um, aren’t we being paid to achieve the best result for the seller? Isn’t buyer interest in a property at its peak when it first hits the market? Isn’t the highest potential selling price within the first few weeks (or week) of listing? Isn’t the best way to get the best price through buyer competition, which is virtually impossible to achieve if a property is overpriced, poorly presented or poorly marketed? The answer to all of those is an emphatic yes, yet there are plenty of agents out there who have built, or continue to sustain, their careers on the back of overpriced listings in order to have more signs as well as agents coasting along based on their previous success. And sadly, there seems to be more than enough sellers happy to list with them.
And herein lies the conundrum. Potential sellers look at signs. And an agent that has a lot of signs in an area looks successful. But are those signs a real indicator of success, or just a smokescreen?
Success or smokescreen?
Sellers notice signs, but rarely how long they’ve been up without a sticker, or when they’ve been taken down without a result. Sellers can see the sticker on a sign that it’s sold, but often have no idea as to the difference between what it was listed at and what it sold for (“But it was on the market for more than $1 million!”, “Yes it was, but it sold for $900,00”). How often would you as a potential seller look at the quality of the agents marketing? How well do their properties present? What are the photos like? How well written is the blurb? Are there floor plans? Do you think to ask, “If this agent has so many listings, how do they service them all? How often will I get a home open? Who will do it?” or realise that after listing you may only ever get to speak to the agents Assistant.
And because the information isn’t readily available, sellers rarely compare the potential value of their property to actual sale prices, but look instead at what other properties are on the market for, “If theirs is worth that much, mine must be worth at least 20/30/40/50k more” or “Wow, look at how much they’re asking for that one! If that’s what it’s worth I think I’ll get that agent to sell mine too!” And let’s face it, what agent in their listing presentation says, “So let me tell you about the sales that didn’t go so well!” And finally, there can be a substantial difference, often worth as much as tens of thousands of dollars to a seller, between getting an average result, which most reasonable agents with a fairly priced listing can achieve, and a great one. How much of that do you glean from a sign?
Spotting the difference
But I need to be fair. There are many amazing agents and fantastically trained agent teams out there that are masters of their craft and fully deserving of their signs and area domination. Sometimes overpricing is at the request of a client, and we agree to try for a particular price for a particular period, and occasionally we get the marketing price wrong because we’ve overestimated how buyers will respond to a property. And sometimes the great results don’t happen because the seller has rejected a strong early offer thinking they’ll get something higher (and sometimes sellers just get greedy). Usually the latter usually end up selling much later for much less. Oh, and just so you know, there are exceptional agents out there that love their job, achieve great results for their clients but have no desire to rule the real estate world or reach 50% market share in their suburb – and many of these are women. Just sayin’.
So if you really want find the best agent to sell your home, look past the signs and think about asking the following:
- In the last 12 months, what % of your listings have sold above the asking price?
- What % of properties that you’ve listed for sale in the last 12 months have sold?
- How many current listings do you have (remembering quantity doesn’t equal quality) and how long have they been on the market?
- How will you be managing my listing? When will I have home opens? Who will run the home open? Who do I speak to when I have questions? How will you communicate with me and how often?
- How are you arriving at the marketing price for our property? What current (and I mean current, not a year or six months ago) sales evidence supports the price you’re recommending?
- If we list at the price you’re recommending, how long do you think it will take us to sell?
- What properties like ours do you have on the market? What price are they? What price did they start at? How long have they been on the market?
- Who would you think is our likely buyer and how will you appeal to them?
- What things will you be saying in your marketing about our property? (ask them to outline benefits versus features)
- How are you planning to market our property? What options, other than online advertising, will you use to attract buyers?
- How do you help clients to best present their property for sale? Can you give me examples of how this helped the selling price?
- What pricing options and selling strategies do you think work best to attract the most buyers? What recent examples can you give me?
- In the last 6 months what properties that you’ve had listed have taken more than 30 days to sell & why? 60 days or more and why?
- What information do you collect from the buyers that attend our home opens? What do you do with that?
- Do you write all offers? If not, why not?
- Would you consider a performance based selling fee?
And I’m sure you could come up with an even longer list of your own. The bottom line is that signs are not the best indicator of success. Success is. And by success I don’t mean number of sales, I mean the agent that can demonstrate that they’re working to get the best possible results for their client every time. And above all, be wary of the agent that gives you the highest price for your property – it’s probable that they care about the sign and the kudos more than you.