Best of Luck,
Does it happen? Absolutely. Are those agents suggesting higher prices to get the listings?
Some, but not all. Many are unsure of how to price a property - either due to limited experience,
or because the market is shifting (either up or down - depending on the area).
Also, there are seasonal fluctuations in the market place. Some agents project increases for a more popular season of the year... While price is based on numbers, it has an element of an art form,
because of "appeal" of each property.
Hope this helps,
Beachfront Realty, Inc.
Some of the responses that place or share the blame on the client miss the point. Our duty is to be honest and to work for the principal. If we say the house is worth more than it is, so that we can for example, gain the market exposure, then we are violating our duty and the Code of Ethics that Realtors vow to adhear to. If on the other hand we state honestly the condition of the market and the principal decides to list high it is our duty to follow through with everything in our power to get that price.
It"s not ethical but, the seller's can take some of the blame for this type of growing practice among realtors. Seller's need to be honest and realistic when it comes to finding a fair market price for the sale of their home. When the seller is interviewing several agents to determine whom should be awarded the contract they in fact are setting themselves up to be mislead. Seller's often need or want to get a certain price for their home and will not stop until they get an agent to list the home for what they think it should be. As an agent, we must resist the temptation of saying yes just to get the seller to sign on the line even when you know that the next agent through the door may say yes. It's a risk but, your a saleperson/marketer, so sell yourself, be creative and make that seller believe in you and your ability to get the job done.
Thing 1...Buying the Listing. Wrong, wrong, wrong! Shame on those who do it. Pumping the sellers up that you can get them way too much money for their home. It's a crime against the sellers who are led to believe they are going to get more than they likely will.
Thing 2...Allowing a seller to insist on a price point higher than the market will bear. While you should try to dissuade them, it's their final decision. If they are inflexible, you probably don't want the listing because it's never going to sell if it's drastically over-priced. You might, however, be able to convince the seller over time that they need to reduce to a more reasonable price point, and then you're serving their interests in helping them come around to reality.
I don't know whether it's unethical or not...I don't do it. Knowing that there are folks with questionable ethics in every field and certainly in real estate - I just concern myself with what I'm doing and helping my clients in an open, honest way.
Blah, blah, blah.
Most are saying that "while this happens all the time", it's not ethical.
Have I ever taken a listing at a higher than market value? Yes.
Have I on occasion driven over the speed limit? Yes, that was me passing you in the left lane.
So, it's a case-by-case basis. Sometimes you can say yes; sometimes no.
And I have had more than a few overpriced listings that sold while "at or below market" listings just sat there..
So, Alan, proceed accordingly. If you think that getting the listing will help with down-line business, then sneak one in. We'll all survive.
Boca Raton, FL
-paragraph 3 from the Code of Ethics and Standards of Practice of the NATIONAL ASSOCIATION OF REALTORS Â® Effective January 1, 2012
The full code of ethics you can read on realtor.org; it may be helpful.
The selling price is... The Market Price.
Still, I like to suggest the low end of the comps to start with ( the listing price).
In a market like we have here in SF right now, it'll sell for much more if prepped and staged properly.
It's unfortunate, but many agents employ such practice... which is why it's always best to interview three or more agents and not disclose to competing (listing) agents what the recommended list price was by other agents interviewed. My $0.02.
I'm in agreement with Pam that it's a violation from NAR's Code of Ethics and Standards of Practice to knowingly counsel a seller to believe that the home is worth more than what comparable sales suggest. The practice you mention is called "buying the listing" and can harm your reputation as an agent. I suggest not doing it.
Good luck to you!
Prudential Connecticut Realty