It seems like every time I write a blog post on Active Rain I am compelled to do so by some vexing situation or experience! Active Rain has become a therapy of sorts for me, and, by the looks of it, many of my colleagues in this industry. Today's post seeks to explore the broker's responsibility in the pricing of real estate and how his/her decision has a ripple effect on the entire industry.
Pricing a property is probably the biggest responsibility an agent has and where the majority of agents spend the least amount of their time. Sure, determining seller motivation is the first step, but assuming you have a motivated seller, an effective pricing strategy can cause a listing to sell or, the undesirable opposite, cause a listing to sit on the market for months or years. In my experience, there are only a couple of reasons why an agent would take a listing that is over priced.
First, the agent doesn't want to upset their client. It is natural to believe that a relationship may not begin on the right foot when you tell the seller their home is worth less than they think. However, in my experience, owners have welcomed honesty, framed by a sound market analysis, and although they may not agree, they will normally go along with the numbers. As we all know, THE NUMBERS NEVER LIE!
Second, the agent is inexperienced, ignorant to the market and really has no clue how the business works. He/she is just happy the phone rang and there was a seller on the other end. There's really nothing like your first listing call...you remember. Stop laughing! You know you've done the same thing! I know I have.
In either instance, there must be some accountability and I believe that lies with the broker. Your agent that is bringing in dozens of listings isn't selling any of them because, despite their best intentions, they have no plan, no direction and no chance of success. Training an agent to responsibly list homes for a competitive price should be high on the broker's priority list. Another consideration is that the broker, over time, can run the risk of becoming the broker of many listings but few sales. It is very difficult to build a solid reputation in this industry be very easy to lose one. The broker with the most listings rarely wins any contests, it's the broker with the most sales that carries the trophy! Lastly, by allowing your agents to list overpriced properties you are allowing them to intentionally mislead the seller into lofty expectations and consistently deliver less than desirable results. In an industry constantly struggling to earn a professional identity, and the respect that comes with it, we are consistently shooting ourselves in the foot.
Responsible brokers build responsible agents, build respectable businesses and bring honor to our profession!