One of the most baffling aspects of the real estate industry is when a real estate agent knowingly takes on obviously high priced properties. When a house is overpriced, it will linger on the market for a longer period of time, putting off potential buyers. Yet the reality is that even with a cold market, many agents will take on overpriced listings. Why would a real estate agent take on this type of listing when their own reputation is at stake? After all, trustworthiness is one of the primary factors that many clients look for in an agent. When an agent stocks their portfolio with overpriced properties, this is put at risk.
The prevalence of overpriced properties on the market is just one of the reasons why it’s so important to choose your real estate agent carefully. As you get started with the selling process, it’s a good idea to compare qualifications and sales approaches. The free online dashboard provided at LocalAgentFinder is an excellent way to facilitate this comparison, allowing you to compare agents in your local area, for free. Register your details here to get started.
Securing House Listings
One of the primary reasons why agents are willing to assume the risk of an overpriced property is in a bid to secure your listing. It’s not that rare for estate agents to offer sales prices that they know are unreasonably high in order to drum up new business. If you are comparing agents and one tells you that your house can sell for a far higher price than the others do, this could be a red flag. Be sure to weigh all proposals equally and follow up with interviewing potential agents to find out more about how they have arrived at this sale price.
There are many qualities to look for when you are choosing the right real estate agent, but sale price alone should not be the deciding factor. This could jeopardize your chance of making a sale at all, and could lead to your home getting passed over the longer it sits on the market. A good real estate agent will highlight their negotiation skills and willingness to work hard to help you meet your goals. They will have a strong knowledge of your local real estate market and comprehensive marketing plans, rather than simply falling back on a high market appraisal. The current state of the real estate market in your area will have more to do with the ultimate value than an agent offering a high sales price.
Staying Grounded when Selling Property
Because selling your home is one of the largest transactions you will take part in, it’s normal to go into the process hoping for a high sales price. As you obtain appraisals from potential real estate agents, it’s tempting to believe that your home’s value might be higher than it actually is. This is one of the reasons why it’s a good idea to get in contact with multiple agents at first using the comparison service at LocalAgentFinder, to get a range of appraisals and stay within a realistic range.
Ironically, if you set the value too high for your home, you can run the risk of making less money overall. Your home may be on the market longer, leading to a loss of confidence in potential buyers who will think there is something wrong with it. There’s no advantage in choosing a real estate agent who allows your house to sit on the market with a ludicrously high price tag. In some cases, agents will not really care whether your overpriced home sells in the end or not. This is because there are additional functions that an overpriced house can perform on their end, without benefit to the seller.
Real Estate Agents May Use Overpriced Property as Free Marketing
In addition to overvaluing your home in order to get your business, agents may also look at overpriced properties as a form of free marketing. Many homes for sale will have a giant sign out front with the name and contact information of the associated real estate agency. Leaving a sign out front of a home that is likely to stay on the market due to its high price tag gives greater visibility for the agent, and once they are contacted with a buyer the highest priority is on making a sale. This sale doesn’t necessarily have to involve your property. Essentially, your house is used as a free billboard for their services and used as a means to sell other houses.
Sign Ads Lead to Phone Calls
As potential buyers drive by a home, they will call the real estate agent’s mobile number in many cases to find out what the sale price is. During this initial phone call, the crafty estate agent can attempt to draw the buyer in by offering to take them to view other properties that fall within the buyer’s budget.
Open Houses and Inspections
The overpriced house can also be used as a lure for potential buyers via inspections. When they come to view the house but are turned off by the high price tag, the agent can offer to show them other related properties that are more within their budget.
Using Newspaper Ads to Attract Wealthy Buyers
Another tactic used by some real estate agents is to place a listing for an overpriced house in a newspaper. They won’t include the address, but will list the price and basic information. This can attract wealthy buyers who are looking for a house in that higher price range. The estate agent can then use the contact information of wealthy buyers to try and follow up on leads with more suitable homes that provide better value for the money.
Expected Price Reductions
Not all real estate agents take on overpriced properties planning to use them for their own agendas. Many are thinking ahead with the assumption that the price will drop when you can’t find any buyers, ensuring that they will still get their commission in the end. However, this assumption can be wrong, because some overpriced properties never sell. The longer they sit on the market, the less desirable they become in the eyes of buyers. Lowered prices are also seen as bad signs by buyers, who often feel that they must signify that something is wrong with the property. This can spiral out of control as you lose confidence in your property’s value, opening you up to even lower offers down the road.
It’s best to avoid all of these scenarios and choose a realistic sales price for your property to begin with. One important factor to take away from all of this is the importance of choosing a real estate agent based on qualities other than a high sales price. The right real estate agent will represent your property with honesty and integrity.
You can compare agents in your local area at LocalAgentFinder for free, side-by-side. Find the right agent to sell your property, and start on the journey to sell your home smarter.