Deceptive agent practice could cost Saskatoon home sellers money
There’s a disturbing practice occurring all too often, which is padding the pockets of some unethical agents at the cost of their sellers. If you’re considering selling a home you should know about it and make certain it doesn’t happen to you.
We are currently in a market of low supply and high demand. It doesn’t take an economist to understand that good homes which are well exposed to the market have the potential to draw multiple offers at, or above the listed price. If agents and buyers are aware that your home is for sale there’s a pretty good chance that they’ll be lining up to view your property. Of course, that’s good for you! The problem, in my opinion, is that some agents may be making an effort to ensure that buyers working with other agents are unaware that a property has been offered for sale, hoping to get the jump and sell the home themselves. On the surface, they may come off looking like a real go-getter. In fact, such practices are only good for the agent and potentially they could cost you thousands of dollars.
In a recent post titled, “Can’t Find a House? It’s Time to Get Ugly,” I shared a story of an agent who listed a fine little property for $239,900 which sold very quickly for $260,010. I’m sure that this agent probably had a buyer which would have been happy to purchase this home quietly, before it actually hit the market. Had she behaved in a sneaky and deceptive manner, she would have brought her own buyer before anyone else knew it was for sale and written an offer herself. In a case like that, the dynamics of the negotiation would have been far different than they actually were. In all likelihood, the buyer would have offered somewhere below the list price and the seller may have been prepared to accept that. It’s very doubtful that the seller would have held out for more than the listed price. However, this agent understood her duty to act in the best interest of her seller and placed the property on the open market as she had promised to do and as a result, the buyer who was prepared to pay the most for the home was made aware of its existence and bought it. Both buyer and seller are pleased with the deal that they struck.
All too often, new listings are appearing on the MLS® with a note which says, “Sorry, this one is conditionally SOLD!” Well I say, “How proud you are for selling your client’s home before 99% of the market even knew it was for sale.” Not something I’d want to brag about.
There have been many instances lately where homes are sold before the close of business on the day that they’re listed. While I wouldn’t go so far as to call this unethical, I’m not sure that it’s sound strategy for the seller’s interests. The home is sold and most of the market is still stuck at work. It seems to me that we should at least allow some evening showings before we jump on an offer. Wouldn’t you think?
It’s time that agents came up with some kind of a pre-listing marketing strategy to expose upcoming listings to buyers so that more of them have an opportunity to see and consider the home. I plan to do that over the next couple of days and I will share the details with you when I do. Mean time, if you’re placing your home on the market, ask your agent to submit the listing to the Multiple Listing Service immediately to ensure that as many buyers as possible know it’s for sale. Try not to be so eager to sell that you accept an offer before most buyers can even see it. Yes, you need to deal with offers in a timely manner, but late tonight is as timely as early today and if you give them a chance to see it, the best buyer for your home will step forward and put their money where their mouth is.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
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Norm Fisher
Royal LePage Saskatoon Real Estate
8 comments so far. We'd love to hear your thoughts.
April 3rd, 2009 at 11:40 AM
Excellent post and unfortunately, something I have seen in our market as well.
April 3rd, 2009 at 11:41 AM
Well Norm,
I will agree with you IF it is happening all too often. But sometimes a seller CAN get more money selling the listing before or within hours of it hitting the mls.
Example:
I listed a property. Eight agents with their buyers showed up within the first two hours and it was a madhouse over there. You know. One of those where the key never makes it back into the lockbox as agents are coming and going constantly.
The property had a huge weakness. No master bedroom. No closet big enough for two people. It was a three bedroom townhome.
I get a call from a buyer agent saying, if the seller will take full price right now and not wait for another offer, we’ll close in two weeks and buy it cash.
I told her to write it up and send it to me. I quickly called everyone else who showed it. All of their buyers hated it!
If the seller had said, no we’re waiting at least 5 days, or even 2 days…they would have known no one else wanted it and the seller would not have gotten full price without an inspection contingency.
There is never one way that always is best…never say never or always
April 3rd, 2009 at 11:41 AM
Ardell, I agree with you completely. I have no problem with listings selling on day one and have represented many sellers in a one day sale. The problem I’m referring to here is one where the agent actually holds the listing back from the MLS so that others are unaware that it’s for sale. They make a deliberate effort not to expose the property, for their own benefit.
I can even accept the there may be circumstances in which a seller wants it to unfold this way. Perhaps money is not their primary motivation. I suspect though, in many of these instances the seller is unaware that the agent is holding the listing back to buy time for himself. That can’t be right no matter how one looks at it.
At present, we are operating with about half our normal number of active listings. In most cases, buyers will literally line up for a good home in a decent location. Every agent has buyers that they can introduce to their listings, but I think they do their sellers a disservice by giving their own buyers preference and limiting who sees the home.
No, I don’t have much respect for an agent who goes to the listing presentation and tells the seller he’ll do this, and that, and this and that to market their home and then does none of them while he, or she walks the buyer in the back door. It is cases like these where agents intentionally limit a property’s exposure which I’m referring to, and which I despise, and it will be a “cold day in hell” before I can be convinced that it isn’t just plain wrong.
Your example is an excellent one where a property which had its issues probably sold fast, and at full price because of all the showing activity. Without that, the successful buyer might still be “thinking about it.” Whatever actions you took generated 8 showings and created the atmosphere which caused this buyer to want to buy now. Further, you followed up on your showings to see if you could get another offer together. It’s clear to me that you were keenly aware of your client’s interests and did all that you could to promote and protect them.
Thanks for coming and I appreciate your comment.
April 3rd, 2009 at 11:42 AM
Your suggestion for a pre-marketing campaign is indeed the answer. In Edmonton we’ve been dealing with a listing shortage for about 8 months now and we’ve seen lots of practices that have not been in the best interest of sellers. Here are the two most common:
1. Put the listing on MLS immediately, with no photos and a note that says “Offers will be considered on [insert date here].”
2. Take the listing, call your own clients, sell it before it even hits MLS.
You’ve already shown why option 2 doesn’t work. The problem with option 1 is that buyers will look at the property, but they don’t like to be manipulated. The agent is clearly just shopping for multiple offers. While it does work on occasion, it backfires a lot. Out of town buyers will just move on to the next property – they don’t have time to wait. Those that do have time to wait, also have time to shop around and in doing so often find something else, something with a seller willing to look at offers.
Our solution, well, I can’t give away all the secrets, but we drip our properties on the market. In short, we pre-market before putting them on MLS, but don’t have any showings until it goes on MLS. That way the property has a chance to get exposure, without delaying the presentation of any offers – we just delay the showings. Everyone gets to know about it, everyone gets a fair crack at it, and the seller gets top dollar.
April 3rd, 2009 at 11:42 AM
Beautiful Sara. It’s nice to connect with agents who are actually willing to put some thought into how they might do the best job possible for their client.
The “offers will be considered” thing hasn’t made big in roads here yet but we’re starting to see some of those in recent weeks and you’re right, buyers don’t seem to like it much.
I prefer the approach you suggest. Everyone that really wants to see the home gets a chance and the sudden rush of viewings works well for the seller too.
April 3rd, 2009 at 11:43 AM
We were just in Saskatoon looking, we are being transferred there, we were feeling the pressure, there were NO HOMES really for us to look at for what we wanted, NO SPEC homes available for reasonable possesion date, to build we were told 8 to 9 months. the resale houses we did find before we came out had conditional sale on MLS on same day it was posted. Which to us was very frustrating because some of these were what we were looking for. We were fortunate to find a new home(by driving around in the area we wanted) that is almost ready,,,but I do agree for resale homes, some of these people that are selling, should wait till it hits the MLS, we are proof that they would of gotten there asking price or more by people like us that are looking outside of the province. Especially us transferring in….and want a fairly quick possesion date.
April 3rd, 2009 at 11:43 AM
Thanks Zoe. So glad to hear that you found a home. This is one of the tougher challenges for anyone wanting to relocate here, and there does seem to be a lot of people who do.
Those agents who are doing right by their sellers and getting the home to the open market are finding some pretty big successes in many cases. Last week, I had a listing which sold 10% over list. I received 12 offers on it the first day on MLS. The free and open market is the best way to determine a home’s true value.
Glad to hear you’re going to be able to make the move to Saskatoon. Thanks for checking my blog. Best wishes to you and your family.
April 9th, 2009 at 1:00 AM
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