Tina Marie, Home Seller in Staten Island, NY

If I list below market to drive price up how do I protect myself from owing realtor's commission if I refuse to accept offer at listing price?

Asked by Tina Marie, Staten Island, NY Sat Oct 19, 2013

What happens if I list with agent below market & first offer is for listing price. What if agent says you got listing price make a contract or pay me my commission. How do I protect myself so I don't owe him/her the commission if he/her doesn't want to wait for a higher offer to come in?

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9
Beth A.Mitro’s answer
Sounds like your trying to create a "Bait" property. Do you really want to create an illusion to all the buyers that are serious and can only afford list price. It's not nice. Please don't do that. There are other peoples lives that come into play. Be legit! Attract buyers by great marketing, making the home look & feel nice and you will get what the home is worth & maybe a little more.
Read or watch The Secret:)
Web Reference: http://agentmitro.com
0 votes Thank Flag Link Fri Nov 15, 2013
Why not simply list the property on target based on recently sold similar properties in the immediate area, and accept the best offer with the best terms; keep in mind that a home is worth what someone is willing to pay for it; it doesn’t matter what the seller needs or potential buyers can afford to spend. Market conditions do matter as does the immediacy for a transaction to take place. In setting a price, it is in the seller’s best interest to focus on the current market conditions....
1 vote Thank Flag Link Sun Oct 20, 2013
Brandon provided you excellent guidance.
Note that in Brandon's scenerio, everyone involved was represented by a professional. No loose cannons allowed. That is where troubles begin.
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Just as Brandon desciribed, I have been on both sides of this strategy. What I like about this is the tire kickers and the 'buying above their ability' buyers are shaken out of the mix quickly. The winners present a 'clean' offer. That, in essence, is what every seller is looking for.
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Don't try this as a DIY project. One of those recent seminar graduates will be able to tie your property up and cost you no less than 60 days.

Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
1 vote Thank Flag Link Sun Oct 20, 2013
Thanks for your compliment, Annette. This is a fun way to run a listing when done properly, in a sufficiently hot market.
Flag Sun Oct 20, 2013
Tina, that's an excellent question!

Realistically, you should never list a property at a price that you won't accept. With that in mind, if you list at a price and don't get any offers above that price, that really is the market telling you that the house isn't worth more.

So, strategize with your agent, and agree on a strategy!

All the best,
1 vote Thank Flag Link Sat Oct 19, 2013
Hi Tina,
I ran this type of listing for a client recently, to liquidate her major "fixer upper" property in an EXTREMELY desirable part of Bellingham, WA, known as Fairhaven. The way we protected against the scenario you describe above was to make it widely known that NO offers would be reviewed until the 6th day after the listing went live. We ended up with 12 written offers (6 others backed out in the last hour) and we sold for all cash, no contingencies, 10-day close, for about 25% above list price. It was very much "fair market value" in the end.
A few points that were driven home during that experience: Your listing agent should have a policy from the get-go that they will not represent or assist any buyers whatsoever. Every buyer will need to get their own buyer's agent and compete on equal terms with everyone else. I had at least 4 or 5 buyers come straight to me and ask for "favors" to get them the house.
Also, in retrospect I would've run it for 7 full days and looked at offers on the 8th day. A little more time would've likely netted the seller a little more money.
Next, we made it 110% clear to everyone that we were definitely going to pick an offer, so put your best foot forward from the start. Dot every i and cross every t, bring pre-approval letter or proof of funds with your offer, and don't hold back. Show us your cards, because there will be no second chances. Another way to approach it would be to say "We're going to pick the top 3 and give them all one chance to revise." As long as you're up front.
Finally, to get this sort of frenzy going we priced it at a ridiculous low number so it gained lots and lots of attention. Don't come on at 3% under fair market value and expect an auction like we had. I've seen other sellers do that, and it will backfire on you.
Best of luck!!!
Brandon
1 vote Thank Flag Link Sat Oct 19, 2013
Do not list your home below ,market value. You want to be able to sell your home for the right price and be able to pay the realtors commissions.
0 votes Thank Flag Link Sun Oct 20, 2013
Sounds like you might be thinking your realtor has not earned his/her commission. If you are displeased with that realtor's service to you, please share your concerns with him/her. Realtors are professionals, and we abide by a strict Code of Ethics. Your realtor should be working to help you get the best price possible.
0 votes Thank Flag Link Sat Oct 19, 2013
Why would you list your house for less than market value when you really expect to get a higher price? This strategy may backfire on you. Although no one can force you to sell at any price, you may be responsible for listing fees, advertising fees, etc. if you turn down all offers. I was involved in a situation where the seller backed away from the sale and the seller was responsible for the buyer's legal fees, home inspection and appraisal. But both brokers involved did not go after the seller for commissions.
0 votes Thank Flag Link Sat Oct 19, 2013
Tina,
There is more to this strategy than listing your place at the low end of market value. Before you do this, you need to fully understand the strategy, trust your agent and the process and be realistic as to what outcome you can expect. No strategy will get you more than your home is really worth. In most cases buyer's will need a loan and require an appraisal. The key to having a great outcome is realistic expectations and the right pro on your side.
0 votes Thank Flag Link Sat Oct 19, 2013
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