So, you're selling your home and you want to get top dollar. You interview 3 agents and decide to go with the agent that will list your home for the most money. Sounds smart. You're figuring if they're going to list it for the most money they'll surely sell it for the most money, right? Wrong.
Beware of agents who overprice listings, they intentionally do it for a couple of reasons that I will outline below.
1) They bought your listing- the term "buying a listing" refers to a strategy some agents use to get listings. Buying a listing means that they essentially told you that your home is worth alot more money than it actually is to excite you and get you to list with them. After you list with them, month after month after minimal showings they will tell you that your home is priced too high and that you must reduce the price. After six months go by and your home has still not sold, you're left with what we in the industry call a stale listing. You missed the initial excitement of the market during the first 6 weeks that your house was listed. Now, you find yourself in a bad spot where no matter what you do you're not going to get top dollar.
You're probably asking what's the point of agents doing that, they only get paid if they sell my home, so why list it unrealistically? The answer is #2.
2) They intentionally overprice your listing knowing that it won't sell at that price so that they can get buyers to work with from your listing. Here's how it works. An agent will overprice a home, host open houses and field calls on the property for the sole purpose of gaining buyers to work with to sell every home but your own. Your home is essentially a lead generator for them.
How do you combat this? Simply ask any agent that you are considering hiring the following two questions.
1) What is your sale price to list price ratio?
2) What percentage of your listings are actually sold?
-Kyle Kovats, New Jersey Realtor
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