Does an agent really care about the price that they achieve for your property when they sell it or are they just after a sale to line their pockets with a commission?

It’s a good question and I’m sure I don’t need to tell you what the general public perception would say if they answered this question.

One thing that I’ve never understood is an agent that does anything for a commission and is prepared to burn a seller in order to get paid.

I’ve always had the theory (even when I first started in real estate) that if you look after your clients, they’ll refer plenty of business to you and you’ll end up successful – it’s not really rocket science is it?

We would generally appraise around 300 properties per year and around 200 of these would be direct referrals from past clients or past clients returning to us.

The agents that don’t understand this are constantly hounding people for business and one of their main strategies is to target the listings of other agents…and if a seller has not received an offer on their property to their satisfaction, they can be vulnerable to believing a story that a new agent has the magic pills that can produce a result.

Let’s return to the tale I told last week…

In summary, we listed a property for ‘Offers above $675,000’ (which was a little higher than we suggested it should be listed for) and the owner rejected an offer of $650,000.

This owner decided to give us the boot and engage an agent that had been hounding them for some time (“hounding” was the term used by this seller so I’m not exaggerating here).

The home came onto the market at a list price of “Offers above $649,000” which was where we suggested that it be listed for some time.

I remember thinking that this agent obviously did a better job at explaining to the owners why it should be listed at this price than I did!

After seven days on the market, I was shocked when I noticed that the price was reduced to “Offers above $599,000”.

“Oh well – the owners must have their reasons and clearly something has changed in their circumstances” was what I thought.

Less than one week later, I saw the home online again and noticed that the price was further reduced to “Offers above $565,000”.

I couldn’t believe it!

They rejected an offer of $650,000 only two months before and now it was listed at a figure that was almost $100,000 lower!

I normally don’t do this, but I called the owner and the conversation went like this…

Me: “I couldn’t help but notice that the price your home is now listed at! I don’t mean to be rude but what’s going on with the price of your home?”

Owner: “Yes it has dropped a long way hasn’t it. I’m not sure that I’m happy with their strategy.”

Me: “Did you agree to this?”

Owner: “Yes”

Me: “May I ask why when you rejected an offer that was almost $100,000 higher less than 8 weeks ago?”

Owner: “Well we’ve had 2 open homes and no-one has come through so the agent only dropped the price to increase the interest.”

Me: “Increasing the interest is one thing but listing it at a figure that’s so low will surely mean that you won’t get anywhere near what you want for it. What price are you now expecting?”

Owner: “At least $650,000. I should have accepted the offer when it was listed with you shouldn’t I?”

Me: “Well that’s beside the point. There’s no way in the world you’ll achieve $650,000 again with a list price of ‘Offers above $565,000’”.

Owner: “Do you think so? They said that we will.”

Me: “Not a chance in the world. It’s a steal at that price. That’s ridiculous!”

Owner: “What do you think I should do?”

Me: “Either take the property from the market immediately or quickly increase the price back to something that is conducive to achieving $650,000. Given we’ve had an offer at this figure, the home must be worth somewhere around this figure”.

Owner: “OK thank you for your advice. I will”.

 Around two weeks later, the owner called me again and wanted to ask for some advice…

Owner: “I don’t know what to do. I have two offers on my home. Can you give me some help?”

 Me: “Sure. What are the offers?”

 Owner: “The first offer is $570,000 and the second offer is $591,000”.

 Me: “Has the price been changed as per our last conversation?”

 Owner: “No, I asked them to increase the price, but they haven’t done it yet. Do you think it’s only worth $591,000 as this is what they’re telling me?”

 Me: “No! We received an offer of $650,000 two months ago and the market clearly hasn’t dropped by 10% in the past 60 days. They’re just trying to get a quick sale.”

 Owner: “What should I do?”

 Me: “Counter both offers at $650,000 if this is still what you want and whilst this will infuriate them (and probably the agent), at least you’ll give yourself a chance of matching the previous offer…and make sure you demand to have the list price changed immediately!”

 Owner: “OK I will.”

 I remember thinking how ironic it was that I was now the trusted advisor when I’m no longer their agent.

I wasn’t annoyed with the owner as he just did what he thought was best at the time and I was happy to help him…but I was furious (for him) that the agent had employed such grubby tactics to gain a quick sale.

Next week, I’ll share the conclusion to this story and let you know how it all ended…and there’s still a few twists and turns that you won’t believe.

Until then…Happy Listing & Happy Selling!