4 Red Flags to Beware of When Choosing a Listing Agent

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.

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.

“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.

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!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.