If you’ve visited my blog before, chances are you’ve caught on to the fact that I’m very concerned about a practice that is occurring regularly which I believe is deceptive and hurtful to both buyers and sellers. It goes like this; the agent lists the seller’s property and promises to give the home full exposure to the market including all kinds of advertising and more importantly, MLS® service. He then does whatever he can to hide the listing from the market while he makes his best effort to sell the property himself, hoping to pocket the entire commission. Perhaps he lets a few of his best buds from the office in on the game, but for the most part, he tries not to let anyone know it’s for sale unless he or someone else from his office has the chance to show it to the buyer.
Why should you care? Well, if you’re a home buyer it robs you of the opportunity to see and consider homes that were supposed to be listed MLS®. It limits your options. If you’re a seller, you should care because these practices are almost certainly going to cost you money; lots of money. Every agent knows that there is a pretty direct relationship between the number of prospective buyers for your home and the price at which your home will sell. If an agent pulls this trick on you, he has no shame. He is a deceptive, selfish person who thinks nothing of stealing from you. He certainly has no regard for the fiduciary duty which he owes to you as your agent.
At first, I was reluctant to bring it up. Now, I’m like a raving lunatic who can’t be stopped until this evil practice is dead. Please forgive my rambling but I do take this business very seriously.
I did a little research today on Saskatoon and area real estate sales dating back to February 15.
Here’s what I found.
- A seller is more than twice as likely to receive an offer which is above the list price if the buyer is represented by another real estate company (or brand). Last week the average overbid exceeded $6,000 and we’ve seen offers as high as 15% over list price in the past few weeks. As a home seller, you probably want to maximize the chances that it will happen for you.
- Where a listing sold for less than the asking price, the average discount was just .4% if the buyer was represented by a different real estate company (or brand). The discount jumped to 2.4% when the same company (or brand) represented both the buyer and the seller. On a $250,000 home, the difference amounts to an additional $5,000.
I believe that this massive disparity is the result of agents who engage in the practice I’ve described. I can’t think of another reasonable explanation and I’m seeing it happen every day.
There is nothing wrong with entertaining offers from a buyer who is working with your agent, or your agent’s company. However, if there aren’t any agents from other companies inquiring about your home, you may want to find out if your agent is playing “hide the listing.”We are currently experiencing the hottest real estate market I’ve ever seen. Make sure your agent is helping you take advantage of it, and not robbing you blind.
I’m always happy to answer your Saskatoon real estate questions.
Royal LePage Vidorra