The average real estate agent only closes two to four transactions per month in a normal market. When the inventory in our real estate market gets very low, those agents are doing even fewer transactions. So when they have the opportunity to get a listing, many will try to ‘buy’ it. By that, I mean they’re going to sellers and offering the world for a specific price.
As an example, a home is worth $1.5 million, but they’ll tell the seller it’s worth $1.8 million. They want that listing so badly but have no real marketing plan to get it sold, so they say the market is indicating it’s now worth less, the street’s too busy, or the home isn’t updated enough. They’ll tell the seller to adjust their price, and they’ll tell them that two to four times until it gets to $1.5 million (what it’s truly worth) or below. Be wary of Realtors trying to do that, especially in a low-inventory market like this.
How do you protect yourself from this risk? Well, our contracts are what we call ‘at-will’ contracts, allowing the seller or agent to cancel the contract using a 24-hour written notice with no fees. This forces us to have accountability and that we’re going to sell your home for the price we said, or you fire us. The other way to avoid lowball Realtors is to pay them a commission based on the property’s sale price. If they tell you your house is worth $1.8 million and they’re charging 6%, drop the commission with each price reduction so that when it gets down to $1.5 million, they’re earning almost nothing.
If you have any questions about lowball Realtors or have a topic you’d like to see in a future video, feel free to drop us a message below or give us a call. We’d love to help you.