4 Red Flags to Beware of When Choosing a Listing Agent

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Most agents are very honest and will do everything they can to help you out. But as with the general population, there are a few types that you need to know about and avoid. If a prospective listing agent proclaims any of the following, you might want to proceed with caution.

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4 Red Flags to Beware of When Choosing a Listing Agent

“You won’t believe what your house is worth.”

Believe it or not, some realtors will tell you your house is worth more than it is so you choose them. Of course you want the most from your property. But if a property is overpriced, it will sit on the market until the low bidders smell blood in the water. More often than not, overpricing results in getting less than the property is worth.

Their Strategy

The strategy in this situation is to get you to sign a listing agreement and simply wait until you give up and drop the price or take a lower offer. In these situations the realtor will likely not spend time or money on advertising because they know it won’t do any good.

How to Protect Yourself

Beware: If someone tells you your house is worth more than everyone else, then it’s likely they are trying to buy the listing from you.

Related: Top 5 Signs it’s Time to Find a New Real Estate Agent

“I can sell cheaper than everyone else.”

With any business you can always find someone who will do it cheaper, right? People think that means they will get more because all agents are the same. Not true.

Their Strategy

The strategy in this case it to tell you the property is worth less (some may even bring skewed statistics as evidence) so it sells for over asking price and very quickly. The low price is the only marketing necessary. They are making less per hour so they are working less and expending less on advertising to make up for it.

If they start high on commission and they cave right away, you can expect them to do the same to you when bids come in. They are weak negotiators and instead of getting better, they just do it cheaper.

How to Protect Yourself

Try to negotiate them down on commission. Choose the best negotiator; you are experiencing how they will represent you.

“I can get you more money per sale than my competitors.”

First off, the listing agent will never talk to the buyer. Never. How can they get someone to pay more then? A great marketing plan can do this, but that’s it.

Their Strategy

There are too many agents saying, “I average $X,000 more than other realtors because I’m good at marketing.” Some are actually good at marketing, while others will simply convince you to put your house on cheaper than it’s worth so it sells really fast and you get more than you expected.

How to Protect Yourself

Ask them how they accomplish such feats and why they are better. If their marketing plan does not involve getting the word out more with a lot of advertising, writing a great emotional description of the home, staging or an amazing photographer, then it’s not true. Those are the only direct ways a listing agent can influence a buyer to put in a bid. Negotiating for more after there are several bids can also do the trick, but that only works if the marketing brought in enough people to negotiate with.

“I’m a top realtor and sell a lot of houses.”

First off, do you want someone who sells 30 homes a month or someone who sells 3 a month? It might seem as if more sales equals better. This is not the case. These realtors are good at one thing: getting more listings. Getting listings is about being good at convincing people you are good at listings. They then pass everything off to an assistant, and you never hear from them again.

Their Strategy

This group doesn’t have time for you and will usually not market your house anywhere but the MLS. They too will convince you your house is worth less so they can put it up cheap, get more than you think it’s worth, sell fast and not have to spend money on marketing. The low price is their marketing.

How to Protect Yourself

Don’t get a top realtor or the person that advertises the most.

When I work with buyers, I specifically search out top realtors because they don’t have time to negotiate and they have too much business for you to be important. It’s easier to get good deals from houses sold by top realtors.

Related: The Epic Guide to Finding an Investor-Friendly Real Estate Agent

What Should You Look For?

Find someone who works for themselves. When you make a call, you want them,not a secretary or assistant to answer. Try to call them a few days later from a different phone number and see if they answer.

You also want someone with experience and a modest number of homes sold in your area. The best person will show you an extensive and specific marketing plan that shows you exactly what they are going to do to help generate traffic and get your house sold. The more traffic, the more likely you will get the best price. Most importantly, they need to be able to tell you exactly why they do each thing on the marketing list. Here is an example marketing list:

  • Postcards to the closest neighbors
  • Open house
  • Publication of your home on X number of websites
  • Professional photography (Do not let them take cell phone photos)
  • Sign in the yard
  • Staging of house with nicer furniture

What do you look for in a listing agent? What have you learned to avoid?

Be sure to leave a comment below!

About Author

Brett Lee

Brett Lee is a licensed Real Estate Broker in Portland Oregon where he helps people achieve a better future so they can do the things that truly make them happy. Brett is also a buy-and-hold investor, property manager and investment advisor.

10 Comments

  1. Darren Sager

    Always fun when a realtor tells you your home is worth more than it is and lists it above it’s value just so they can use it to sell other houses! Always look into the days on the market they realtor averages. If they let properties sit on the market ask them why. It could be that they overpriced the house, using it to sell others or the homeowner was demanding a higher price than it was worth. Good to know either way.

    • Matt Cramer

      “It’s easier to get deals on houses sold from top Realtors”? Really? I have to disagree there. With the top agents I’m aware of it’s actually much tougher to get a deal because it’s almost always a multiple offer bidding situation because of their marketing.

  2. Matt Cramer

    “Find someone who works for themselves. When you make a call, you want them, not a secretary or assistant to answer. Try to call them a few days later from a different phone number and see if they answer.”

    I’m a little confused, why is that a bad thing? I currently am a single agent who does most everything myself however I plan to have an assistant to make things smoother and allow myself to be more efficient. You don’t call Microsoft tech support and get Bill Gates.

    This article has a few good points like being aware of agents who overprice properties etc. yet I feel like you’re putting a negative spin on some potentially good attributions in agents out there as well.

    • Darren Sager

      I agree with you Matt. Having an assistant is a good thing that helps the situation. If you can’t get a hold of the realtor directly EVER, then perhaps that’s not a good thing. But having an assistant or having a team of people isn’t bad at all. It’s good.

  3. Hi Brett,
    I’m a Realtor and I must say, you are right on target and I will add.

    You should ask for a Service Level Agreement (SLA) which spells out exactly what the agent is going to do for the first 21 days on the market. At the end of 21 days, ask for some performance data and ask them to compare it to historical data on other listings. As you said, “Price drives showings”, if the marketing is done correctly. Signing a SLA assures that the marketing is done correctly, so Price, Condition (staging) and Access to the property are the only variables that remain. The seller is in control of all three of those variables. The SLA keeps the seller in control. I’m happy to share a copy of my SLA, if anyone wants an example.

    After 21 days you can access the feedback from the showings, if any, and make changes to the property:
    a) Board the dog so people can get into the house
    b) Take out the garbage regularly, so the house doesn’t stink
    d) Remove clutter, Paint, Clean, and perhaps refinish some floors

    I never recommend spending money on anything beyond those items listed above, when owner occupied.
    I will say that I wish flippers would consult with me before fixing a property that they want me to list, so that I can save them money and sell the house quicker too.

    Now the important part, You’ve tested the market and it rejected your price, now what?
    How much do you lower the price and when? Properties have the most value during the first 45 days on market, so you want to make your adjustment after 21 days and before 45 days, don’t wait!

    Time is of the essence and you don’t want to adjust the price more than once, because that shows weakness and the market will smell blood in the water and low ball you. Picking the right price is important. Most markets are 94-96% efficient, which means the Last list price (LLP) to Sell Price (SP) is very efficient. Have your agent look up the ratio for your market. You need to have your price low enough to attract an “A1” buyer, otherwise you will attract bottom feeders. Another way to think about this is; You have $4K for every $100K before you are priced too high and your property doesn’t sell.

    I have an algorithm that guides my clients to the price adjustment that will get their property sold in the next 21 days on market, (within the 45 peak valuation period) without leaving money on the table. I consistently get multiple offers with this method and/or full price offers. I’m happy to coach anybody that needs help with their listing. Call any time.

    Bottom line, Price drives showings, your house sells itself if it gets showings and the property owner is in control with an SLA.
    Good luck,
    Drew

  4. Ryan Thomas

    I also love agents tell the home owners to list with them because they already have ton’s of buyer’s for their house. I don’t understand why seller’s don’t just tell them to bring the buyer’s and work out a buyer’s agent commission!

  5. Ayodeji Kuponiyi

    Great post Brett. I like what signs to read from realtors. Funny thing is that most of the red flags you mentioned, I find myself wondering/asking how can they prove it. Its goes back to trust but verify. Ask questions, ask for proof and do your own due diligence and don’t doubt your common sense.

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