Ahhhh….the old “bait and switch” has been around for a long time, and I am sad to report it is alive and well in the real estate industry. Yes, even in our rural area. Whether it is residential, farm/ranch, or commercial property, a listing agent might do whatever it takes (and not for your benefit). It so happens to be one of my biggest pet peeves! Watch my intro below…
REALTOR® Code of Ethics – Did the Listing Agent Mislead(lie) To You?
Every REALTOR® is bound to the National Association of REALTORS® Code of Ethics. Here is a link to the entire STANDARDS OF PRACTICE but pay close attention to Standard 1-3…
- REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value. (More on this later)
What the Heck Is the “Bait and Switch?’
Read the fine print! Did someone make you a guarantee or a promise that sounds too good to be true? I hate to burst your bubble – but it probably is. Below are three examples of how you could fall victim to it as a seller, and at the end, I’ll give you a few tips on how to nip it in the bud.
1: Did An Agent Promise to Sell Your Property for a Significantly Higher Price Than Other Agents?
- If one agent tells you the market price of your property is $100,000, and another $150,000 – Red Flag
- If one agent tells you the market price of your property is $500,000 and another $650,000 – Red Flag
- If one agent tells you the market price of your property is $1,000,000 and another $1,500,000 – Red Flag
What is the point of the misrepresentation you ask? The point my friend is to GET THE LISTING. It is unethical to intentionally tell you your house is worth more than the actual market price. (Read the bottom of the post for suggestions to know the difference) My thoughts? If an agent is willing to act unethically in this manner – what else will they do?
2. “I Have So Many Buyers Already Pre Approved Just Waiting To Buy Your Home Quick”
Hmmmm. This statement has so many things wrong with it, so let me briefly touch on a few because EVERY AGENT has buyers they know are looking for a property.
Have these “buyers” actually seen the home? Hmm? Have they been told the price? Buyers are smart. Give them a little credit would ya? They will jump on a property that is priced correctly. But if it is not? Then they will not even waste their time or the chance of offending you(the seller)…So therefore, the property will sit on the market.
Does this particular listing agent represent these buyers? Because they cannot represent BOTH buyers and sellers at the same time. This might not mean much to you, but it is a HUGE deal. If you have questions on representation, read over my INFORMATION ABOUT BROKERAGE SERVICES . Ask if their buyers have signed Buyer’s Representation Agreements with them. If so, how do they plan on handling that issue.
What about the other agents who have pre approved buyers that might be willing to pay you more? LET THE MARKET DECIDE. My Thoughts? If the goal is to sell the property quickly – the job of the listing agent is to market it to as many potential buyers as possible, regardless of if they are represented by another agent or not. The goal of the agent should be to do what is in your best interests, not their own.
3. For Sale By Owners: How You Could Be Misrepresented Too
If you have been trying to sell your home without a real estate agent for some time, with no luck, then you may be contacted by agents (including those out of your area) wanting to list your property as well. Here are a few things to look out for:
- See #1 above. A promise to sell your property for more than you had it listed for. My thoughts? Maybe they can because they will market it to a much wider audience, or better photos and videos with bring more buyers. This most certainly can be the case. Be sure to read my post YOUR LISTING AGENT SHOULD MAKE THIS A PRIORITY
- See #2 above. The only question you need to ask this agent is if they have several pre approved buyers lined up to buy your property, why have you not brought them to see your property while you were trying to sell it yourself…If they had the buyers – they should have already shown your property to them.
- If you are registered on the DO NOT CALL LIST, it is a violation of the Federal Trade Commission’s “Telemarketing Sales Rule: to solicit your business…even a real estate agent
Questions To Ask The Listing Agent
Great points Cori – now give me advise on what to ask listing agents. First, read my post on HOW TO CHOOSE A GREAT LISTING AGENT
Okay, there might be very few instances where there is a lack of comparable sales and the price is actually a shot in the dark. Or you might be the one seller out of a hundred that gets lucky with the “right buyer, right place, right time” and actually get an above market offer. So yes, it is possible, but NOT PROBABLE.
Be sure to ask the listing agent for a Comparable Market Analysis (CMA). EVERY LISTING AGENT should provide this to potential sellers to explain and justify their reasoning for their opinion on your market price.
Lastly, ask the agent what their typical days on market is. How many days was the home for sale, before it actually closed. Properties that start out with an unrealistic price stay on the market longer.
For those agents who promise to sell your property fast, ask them exactly how they plan on doing that. How are they going to market your property different than other agents? Ask for them to present you with their MARKETING PLAN.
Being Realistic On Price Is Not For Every Seller
If you are a seller who has all of the time in the world to sit on your property and wait for the perfect buyer, then by all means, you are entitled to that right. I do have clients that fall into this category, all of my fellow agents do as well. As long as you are realistic with the time frame, listing at a higher price is a strategy that does work, it just might not be right for everyone.
There are instances when we are wrong! The market does shift and move. Your price might be justified by most recent comps, but a slowing market can change that. Your agent should explain this to you. However, DO NOT let this be their excuse only a few weeks after listing it with no showings….
My Final Thoughts…
I am a realist. Shoot me straight. I do not like surprises. Heck, I couldn’t even handle waiting to find out if my children were going to be a male or female…I plan. I am prepared. That is my nature. If you are someone who wants to receive honest, straight forward advise, then I am the real estate agent for you.
If you are someone that just wants someone to tell you what you want to hear…I probably wouldn’t be the best fit for you. Again, there are many great local agents to choose from, make sure you do the research and choose the one who is the best fit for you.