Home Buying in 60148>Question Details

Mike, Home Buyer in Chicago, IL

Why are agents hurting their clients?

Asked by Mike, Chicago, IL Tue Jul 22, 2008

In Lombard and surrounding towns, why are you denying the declining real estate market? Why are you allowing your clients to over-price their homes for months? Yeah, once in a while some idiot wil overpay. YOu say houses are selling. Are they? ONly reasonably priced ones are. As you start coming to your senses and lower prices a bit, the reduction is eaten up by rapidly increasing interest rates... so a month ago on the same house you asked 325 for, and I would have paid 290, you insisted on 300. Now you are asking 300 and expecting 290. But 290 with today's rates is the same as 300 a month ago. You'll eventually end up selling the house for 280 or less but it will cost the buyer the same as 300 if rates continue increasing. Way to mess up everything. Come to your senses now. Sell your clients' houses quickly. Save them headaches, save buyers headaches. Your commission will be slightly less. Big deal. Get a clue. You're knuckleheads and you will see...

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9
Good Point!

However, we can only suggest a listing price to our clients. Overcoming objections is just part of our job.

Giving them factual data, we can show them, what price, homes like theirs, have sold for in the neighborhood.

It's not our job to force sellers to list below their expectations of what their home is worth. It is our job to use market data to give sellers market knowledge. If the sellers choose to disregard the information, we need to list the home, at the seller's price and allow it to be rejected by the market. .

A listing price has nothing to do with our commission. We are paid, as a listing agent, and a buyers agent, to get the highest value for a client, on either side of the transaction.

May I remind you, that we don't get paid until a home closes Zero from Zero is still Zero. It doesn't behoove us to take on a listing that we don't know we can sell.

A home is only worth what someone is willing to pay. Comparables are only past historical data. They are tools we use to perform our job. They are not the end all, be all. It is a starting point. And with good communication, we get the job done. But, they are not a guarantee.

Most sellers have an emotional value that they have placed on their home, long before they EVER even begin to interview agents. And that price has nothing to do with the listing agents competency. Or market knowledge.

As an agent, we must present all offers. We can't force the sellers to take offers.

So, I ask you who's hurting who? Are agents hurting their clients? Are buyers trying to get a great a deal ? Or are sellers not willing to let go of their home at a price a buyer is willing to pay?

Some agents have put systems in place that afford them the luxury of being able to walk away from listings. And some have not.

I've listed homes, in this market, that have had multiple offers within hours of listing.

In either case, you as a buyer should have representation negotiating on your behalf, that knows your market ,just as well as the listing agent. Which would afford you the luxury of depersonalizing your transaction.

It is our job to take the stress out of Real Estate Transactions. We negotiate everyday, without emotions because our only vested interest is a satsfied client.

On either side of a transaction, you need to interview multiple agents. There is no special number as to how many you should interview. But, you should feel comfortable that your agent has your best interest at heart.

If you'd like a list a questions you should be asking your agent and be able to feel comfortable with their answers. Please feel free to contact me directly.
1 vote Thank Flag Link Wed Jul 23, 2008
Mike, thanks for your even handed assessment of today's marketplace, and the agents role.

Clearly, some agents are hurting their clients, in Lombard, and elsewhere around the country, by recommending a "too-high" price. But you've also clearly identified part of the "reason" why sellers overprice their homes when you said "once in a while some idiot will overpay" and those agents/sellers are holding their breath hoping that their home will be the one that attracts another idiot.

Agents recommend listing prices, based on recent (less than 3 months) comparable sales in the area. We try to make sure the homes are truly comparable, and very near the subject property. We also try to recommend to the seller that they might gain an advantage by pricing "below the pack" rather than in the middle of the pack or at the top. Sellers don't always take our advice.

Ultimately, the decision belongs to the sellers. We can't force them to list where we want, nor can we mandate that buyers pay more. And we're not overly concerned with the extra $150.00 we might earn for an additional $10,000 in list price. At that point, we have to decide if we want the "overpriced" listing. Some agents accept them, hoping that the sellers will see the light in a short period of time, or perhaps that "idiot buyer" will appear. Some agents decline to take those listings.

Interestingly enough, Mike, on the flip side, agents are often accused of forcing sellers to price their homes too low, in an effort to make the agent's job easier, just to get the "quick sale". That we're not concerned with the sellers getting "top dollar", merely concerned with turning and churning those listings so that we can keep our commission checks coming.

So which is it? We're overpricing, or we're underpricing. And apparently we're all doing it as a large single-minded hive. Today Lombard, tomorrow the world!!
1 vote Thank Flag Link Wed Jul 23, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Agents do not "allow" clients to over price. They advise them to price competitively, and sellers decide what they want to price at. Some agents go along with this. Others walk away from the listing.
1 vote Thank Flag Link Tue Jul 22, 2008
O.K., sometimes the problem is that the seller is working with an agent who is not familiar with the local market and not familiar with how the home compares to other homes in the area.. Which means they really do not know how to price the home correctly. Also, if you are a seller who is willing to work with a discount broker who is only going to post a sign on the lawn and not market the home correctly, well then you will be working with someone who is not aware of the proper way to price a home in todays market!!
Please, when it is time to sell your home, interview at least (3) local Realtors (who work Full-Time), in your town and ask for a CMA from each, this way you will price your home to sell, not sit on the market at a price that is unrealistic.
1 vote Thank Flag Link Tue Jul 22, 2008
Talk to the seller's not the agents.
1 vote Thank Flag Link Tue Jul 22, 2008
Hi Mike-
Wow! Not all agents are created equal, and I'm sorry that you had a bad experience. But, we shouldn't all have to pay the consequences. Many of us do work extremely hard for the income that we make. Many of us are underpaid for our services.

Unfortunately, as is true in any profession, there are always bad experiences, and everyone else in that profession gets judged by that bad experience.

I suggest that the next time you decide to buy, you interview multiple agents, if you have to, to find an agent that will work on your behalf. Ask them questions, trust in their answers and ask for references.

If they're serious about there profession and getting the job done right for you, they will work with you to make you feel as comfortable as you need to feel.
0 votes Thank Flag Link Fri Jul 25, 2008
Original poster here...Thanks to those of you who are honest in acknowledging the problem. I've seen houses that aren't paid off sit for 3 months or more. On a 250K mortgage, that's a good 5 thousand in extra costs to the seller right there. Now factor in the interest rate increase that just took away 10,000 in buying power from buyers. Total 15k so far... It's sad that people didn't sell me a house this summer for a price that is more than what they are going to end up netting 2 months to a year from now. Hurt us both... and as for buyers' agents... I forgot one aspect of the problem- buyers' agents allowing, even recommending, overpaying for houses. mine was about to let me overpay 2x. I backed out of 2 contracts that I hurried into under the advice of my agent. One house sold for 10 grand less a week later and the other has yet to sell. I'm going to bet that the 2nd one sells for at least 25k less than I almost paid. Agents count on careful buyers getting worn out looking and they try to rush us to purchase. Agents seem to be in the habit of showing a house and basically saying "buy it now before someone buys it first." You guys seem to be not used to actually working anymore.

I still want the 2nd house but at a fair price. It's not my fault that the current owner overpaid 4 years ago- and this blunder seems to be what is driving the current asking price.... the most unfortunate part is that I'm probably going to enter into a lease now and be unable to buy when their price comes down. However, I'll also be able to save a lot more money in the next year and hopefully prices will be even lower next year. Hopefully you agents will get used to working for your money like the most of the rest of us do.
0 votes Thank Flag Link Thu Jul 24, 2008
Mike----Perfectly said!! Unfortunately this is true in many cases----but there is also other times when it isn't. Pinpointing a price---the "magic number"---in this market is extremely difficult----even for us seasoned agents! When I place a property on the market my job as a listing agent is to get the highest price for the property and successfully sell and close it---w/in a reasonable amount of time. When I am working with a buyer--my job is to get him the best price possible ---along with the terms etc. When listing in this market---because it changes so quickly---you must explain that situation to your sellers---which I do b/4 I even agree to list the property. My theory: if the home, w/in about 3 weeks, has not received a lot of action and any offers, we basically know where it is going----NO WHERE--- the sellers should reduce----IMMEDIATELY. When I take a listing I explain that clearly---and I will not take it otherwise---mainly because the inaction of the seller to comply will COST THEM DEARLY! I do have clients that are totally on board with that at the time of the listing---and low and behold---they decide against that after the 3 weeks are up! They think their home is different---or because they have done so much to it---or because they love it----they believe someone will be willing to pay more than the market is "saying" it is worth at this point and time----so wrong. I watch these mistakes across the board day in and day out---and it costs them 1000's----a lot of the time 10s of 1000's. When acting as an agent for the seller----this disturbs me greatly----the last thing I want to see, is for my client to lose money---sometimes, they just believe they know better, and there is no reasoning with them. The only option that leaves us with is to cancel the listing---for their own benefit.
0 votes Thank Flag Link Wed Jul 23, 2008
Good point! This happened in specific neighbourhoods down here in the parrallel universe, the humid version of Chicago we call New Orleans...but not to worry....those folks have dropped their prices in the past 2 weeks and it is definitely warming up the market!
Web Reference: http://iansellsnola.com
0 votes Thank Flag Link Tue Jul 22, 2008
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