ShortSaleWealth.com

Yeah, I thought that might get your attention…

As licensed real estate agents (Yes, I’m one too!) we have fiduciary responsibilities to the homeowner to be honest and upfront with them. This is a fact. 

I’m seeing more and more listings where a homeowner is losing their house to foreclosure because they had the property listed for 8 months and it didn’t sell. When I look up the comps, I see that the reason the house didn’t sell is because it was WAY overpriced.

We recently come across a person facing foreclosure that owed $197,000 on a house that was realistically worth $230,000.   Not a ton of equity there, but still enough to sell the house and have enough leftover to pay realtor fees, etc…

This house was listed with a realtor for 7 months with no bites.

But WHY???…

Apparently the homeowner informed their agent they thought it was worth $275,000 even though the agent advised them it was probably worth much less.  The homeowner decided they wanted to list the property for $275,000 regardless, just to “see what happens.”  

So the listing agent, afraid of losing the listing, agreed to list the property for $275,000, kknowing full well that it was priced too high.

The house didn’t sell because the listing agent didn’t stand his ground.

There is no rule that says that real estate agents have to accept a listing from a homeowner.  If the homeowner is being unrealistic in their pricing, why would a agent even want a listing like this? All it accomplishes is a false sense of hope with the homeowner that the house “just might” sell for their unrealistic asking price.

Where so many agents utterly fail…

…is in standing for what they KNOW to be right, even in the face of an obstinate customer or client.  This is why I so often end up helping the homeowner out of the mess they’re in months down the road.

While it’s true that the homeowner is the one that decides the final listing price, the agents responsibility is to do a couple of things:

1. Present a realistic price point for the homeowner to sell the house in a reasonable amount of time.

2. If the homeowner is thinking the house is worth more, the agents job is to bring the homeowner back down from la la land about what they THINK their house is worth vs. what it will ACTUALLY SELL FOR.

3. If the homeowner is still in la la land and refuses to come back to reality, the agent could and should deny the listing due to the homeowner being unrealistic in their final decision about asking price.

I see agents make this mistake all the time, and it ends up hurting both the homeowner and the realtor in the end. If a realtor is truly doing their job, and the house was really only worth $230K, this realtor did no one any favors by listing the house for $275k. He/she should have told the homeowners that he/she would not list the property for them at that price because it’s an unrealistic number, then explained to the homeowner WHY what they thought was unrealistic.

Not only is this in the best interest of the homeowner, it’s also in the best interest of the realtor.

If the house isn’t sold, not only is the homeowner unhappy, (or in this case, facing foreclosure,) there are also no commissions earned.

Both the homeowner and the agent end up wasting their time on a situation that could have been avoided if the correct expectations were set up front. And if the seller would have still been unwilling, the only thing that the agent would have missed out on by denying the listing is wasting a ton of time and money listing a property that would never sell anyway.

Integrity is the Real Bottom Line!

I think this is where integrity comes into play in our business. If we’re acting out of integrity, it’s our job to tell the homeowner the truth about their situation, even if it’s not what they want to hear. I don’t think we’re doing them any favors unless we’re being honest and upfront with them, even if it means being BRUTALLY honest.

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