We're all familiar with that all-too-familiar scent - the lingering odor of a salesperson employing a pushy sales pitch and manipulative tactics. Unfortunately, this phenomenon isn't limited to the retail world. In the realm of real estate, some agents also succumb to this practice, and it's known as "commission breath." In this article, we'll delve into the concept of commission breath and offer insights on how to ensure a more positive and client-centric real estate experience.
It's important not to paint all real estate agents with the same brush based on a few negative experiences. Rather than becoming disheartened by the scenario described above, consider raising your expectations when choosing a real estate agent. During the agent-selection process, prioritize individuals who prioritize your interests over their commission earnings. Opt for an agent who is genuinely concerned about securing the best deal that aligns with your financial and lifestyle needs.
When it comes to listing your home, one of the most significant errors you can make is selecting an agent solely based on the listing price they propose. While a higher price might initially seem advantageous, it's important to recognize that this tactic is often exploited by agents with commission breath. Let's explore these concepts further.
A home's value is defined by the equilibrium between what a qualified buyer is willing to pay and what a seller is willing to accept. This principle holds immense significance, as a home's market value is ultimately determined by the prevailing market conditions.
Imagine your property: a 3-bedroom, 2-bathroom, 1800 sqft brick house nestled in a neighborhood primarily consisting of similar brick homes ranging from 1700 to 1850 sqft. Over the past six months, comparable homes within your vicinity have been sold for prices ranging from $245,000 to $252,000. In this context, a competent real estate professional would likely suggest listing your home within the range of $245,000 to $252,000. Such comparable sales serve as valuable indicators of the market's valuation of houses in your area. Importantly, this approach mirrors the methodology employed by appraisers during the buyer's loan finalization process.
A genuine professional agent will meticulously research and propose a reasonable listing price based on the aforementioned factors. In contrast, an agent with commission breath may advocate for a higher listing price, say $260,000 to $265,000, in order to secure your listing. The reasoning here is that you can always reduce the price later, but it's challenging to raise it. However, falling into this trap can yield unfavorable consequences.
Overpricing your home increases the risk of reduced showings and extended time on the market. In today's digitally-informed world, buyers possess the tools to compare prices and make informed decisions. If your house is listed significantly higher than similar properties just a couple of streets away, it might be overlooked in favor of more attractively priced options.
The cycle typically unfolds like this: The agent suggests lowering the price after a few weeks of limited activity. This cycle continues until you reluctantly agree to reduce the price to a more realistic figure. However, by this point, your house has spent more time on the market than its counterparts, and potential buyers might perceive the price drops as a sign of desperation. This perception could lead to low-ball offers and an even more challenging selling process.
So, why would an agent resort to this strategy? It often stems from a desire to secure a long-term listing agreement, counting on the assumption that you'll eventually relent and lower the price to expedite the sale. This approach is essentially playing the "long game."
To avoid falling victim to commission-focused agents, conduct thorough research before hiring an agent. Seek out reviews, request a list of the agent's recent sales within the past six months, and analyze whether their properties spent longer on the market compared to other sold homes in the vicinity. Don't hesitate to ask questions and communicate your expectations openly. Remember, you're in control of your property, and the chosen agent works for you. Prioritize an agent who empowers you to steer the course of your listing.
By recognizing the pitfalls of commission breath and taking a proactive approach to selecting a real estate agent, you can elevate your real estate experience. Embrace an agent who genuinely prioritizes your needs and aspirations, and embark on your property journey with confidence.
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The COVID-19 pandemic triggered a seismic shift in the housing market, leaving many to wonder about the conspicuous absence of the Baby Boomer generation. Could the anticipated stock market turbulence have put a damper on their housing plans? Was the
We're all familiar with that all-too-familiar scent - the lingering odor of a salesperson employing a pushy sales pitch and manipulative tactics. Unfortunately, this phenomenon isn't limited to the retail world. In the realm of real estate, some agen