Real Estate Rant.
This kind of shit irritates me beyond belief and until people start understanding it, it’s going to keep happening. I’m going to lay out 3 scenarios, based on real, recent sales. They are all waterfront homes that are all, presently, very desirable based on location and condition.
House A lists for $875,000 in what is a very hot market. The local listing agents see and understand this, so they propose to their client that they designate an offer date, in order to maximize their exposure to as many buyers as possible to try to capture the best offer available. In those 7 days, upwards of 40 buyers view the house in person, and come offer date, there are 12 offers to present. The listing agents had their own offers, but their offers weren’t the best, and it is another agent and his buyer that successfully purchase the house. The house sells firm for $1.2M – for $325,000 over the listed price.
House B lists for $1,395,000 in what is still a very hot market. The local agents see and understand this, so they propose to their client that they stipulate that all offers coming in need to have a 48 hour irrevocable, so that there is sufficient time for buyers to see the home even after an offer has been registered. On the second day of it being listed, an offer is registered, and all the agents who have shown the property or subsequently book showings are notified of this. In those 48 hours following the first offer being registered, showings continue, and when it comes time to view the offer, there are a total of 6 offers to present. It is not the listing agent that had the successful buyer, but again, another agent and their buyer. The house sells firm for $1,612,000 – for $217,000 over the listed price.
House C lists for $1,190,000 in what is, again, an unprecedented market. The out of town agent presumably sees this, so they propose to their client that they designate an offer date, in order to maximize exposure to as many buyers as possible to try to capture the best offer available. The offer date is disclosed on the listing, a week from list date. But on the same day, the property status changes from Active to Conditional. A local agent (*cough* me) calls the listing office to book a showing anyway, because conditional is not the same as sold firm. The agent is informed that they are not taking anymore showings while the house is sold conditional. Eight days later, the property status changes from Conditional to Pending (sold, but not closed). The house sells firm for $1,305,000 – for $115,000 over the listed price. It is the listing agent who represented the successful buyer.
Now. I have no doubt in my mind that the seller of House C is ecstatic – their house sold for so much more over asking! In such a short time! What more could they ask for!? They will tell their friends and family that Agent C did such a great job, they’ll pack their bags, and they’ll skip away with their money in the bank. And Agent C will take their 5% and whistle on home, with a "Sold in One Day over Asking!" advertisement and a new testimonial to go with it brewing in their head.
There is a very big difference between working for your clients (agents A and B) and working for yourself (agent C). It is much easier to list a home, give your buyers the jump on it, and rush an agreement in before anyone else has an opportunity. It is much harder to turn down bully offers. To put your clients through the ringer with back to back showings. To field and present a dozen offers. To be firm and stick with a plan. Who knows, maybe Seller C knows all this and is happy anyway. Maybe he doesn’t need the extra 6 figures he left on the table. Maybe he wouldn’t have changed a thing if he were fully informed. Maybe.
I don’t presume to be correct all the time. Markets can change like the weather. There are dozens of unique, individual factors for every sale and for every person and it is impossible to predict or know them all. I will never say, definitively, that my plan is the best one, or the only one, for my client. But the plan is for the client, not for myself. And there is a difference.