Selling your home - Is it a matter of trust?

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ut2sua
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Joined: Tue Apr 21, 2020 9:19 pm

Selling your home - Is it a matter of trust?

Post by ut2sua »

I am ready to sell my house to get ready to retire. I don't know any listing agent personally. My question is: in the current seller market, is there a way for the owner to oversee the selling agent so that they don't just show their friend's offer as the highest offer (and throwing away higher offers from other buyers). Is this simply a matter of having to trust your listing agent (whom you don't really know)? Close to where I live, there are homes selling for several hundred thousands over asking price. Did those home owners just totally depend on their listing agents to bring in the highest (or most qualified) offers? Thanks in advance for all comments.
123
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Re: Selling your home - Is it a matter of trust?

Post by 123 »

Agents are motivated to sell the house at the highest price because their commission is usually based on the sales price.
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Zeno
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Re: Selling your home - Is it a matter of trust?

Post by Zeno »

ut2sua wrote: Tue Jan 25, 2022 1:17 am I am ready to sell my house to get ready to retire. I don't know any listing agent personally. My question is: in the current seller market, is there a way for the owner to oversee the selling agent so that they don't just show their friend's offer as the highest offer (and throwing away higher offers from other buyers). Is this simply a matter of having to trust your listing agent (whom you don't really know)? Close to where I live, there are homes selling for several hundred thousands over asking price. Did those home owners just totally depend on their listing agents to bring in the highest (or most qualified) offers? Thanks in advance for all comments.
I don’t think you have much to worry about, but would recommend you retain the services of an agent who works with an established firm with a good reputation.

It isn’t just about trust. It is the law.

When you select an agent/firm, you will enter into a legal contract that covers the services they will provide and how they will conduct themselves.

They will also literally serve as your agent. And under long established legal standards of agency, you are the principle and they act on your behalf. You make the ultimate decisions such as which offer to accept; the agent does not in the typical scenario. The agent will “present” you with the offers as they come in for your consideration.

Real estate agents are (or should be) also subject to codes of ethics. https://www.nar.realtor/about-nar/gover ... f-practice. To mitigate your concerns you might ensure that you have retained the services of an agent who is a member of NAR or any comparable entity that may exist.

A real estate agent acting contrary to the above would be putting themselves in some amount of legal peril.

Finally, most agents are compensated via a commission that is tied to the sales price, so they are — or should be — economically motivated to sell for the highest price.

At the end of the day, your primary risk is ending up with an agent who isn’t willing to work very hard on your behalf, instead of the self-dealing hypothetical you have described. Selling a house for the highest price generally takes a lot of work. You want an agent that is working hard to present your house to as many credible buyers as possible and as quickly as possible. Subject to your consent (because again they are your legal agents) that typically means open houses, advertisements, savvy internet approaches and the like. Agents also play key roles in giving advice as to the sales price, as they should be attuned to the market and what buyers are seeking. Again, your contract with them is important and should specify all of these details, to include the manner in which offers are handled.

Good luck with your home sale and retirement.
Carefreeap
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Re: Selling your home - Is it a matter of trust?

Post by Carefreeap »

The highest price may not be the best offer for you.

What you want is an offer that is the best price you can get and can close without unreasonable delays. You might want to take a slightly lower price from someone who has a larger down payment, better credit and prepared to handle minor repairs on their own dime. You also might want to negotiate staying in the house for another 30 or 60 days after closing in order for you to find suitable housing.

It's a crazy market in a lot of places. Some agents deliberately set a price lower to generate multiple offers. Others will tell you that they suggest setting the price as the last house that closed however due to very low inventory buyers are still making bids over asking.

Good luck!
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sureshoe
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Re: Selling your home - Is it a matter of trust?

Post by sureshoe »

Despite my general loathing of the real estate business, I do believe most people are honest and wouldn't do something as unethical as shielding offers.

I would consider FSBO if I were you, particularly if you're saying you WANT to oversee the process. Why pay a commission to a selling agent if you're going to oversee them? Just get a flat fee listing and sell it yourself, you have the control and will get a better price.
Topic Author
ut2sua
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Re: Selling your home - Is it a matter of trust?

Post by ut2sua »

Thanks everyone for your valuable posts. I am still leaning toward having an agent as I can see the benefit of having someone to smooth out the selling process. I will interview a small number of listing agents, ask lots of questions, and hopefully be able to pick out a good agent/team with a strong network. Your replies do make me feel better heading into this adventure. Cheers.
Californiastate
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Re: Selling your home - Is it a matter of trust?

Post by Californiastate »

Agents want the highest price but they also want a quick sale. A successful realtor won't drag on a listing for months for another $2k in commission. Their rep depends on them selling homes quickly for reasonable prices.
TSR
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Re: Selling your home - Is it a matter of trust?

Post by TSR »

I recently sold my home in a crazy sellers' market. I first spoke to an agent who was my mother's close friend (and a good agent of solid reputation). She gave me one estimate for what to expect on price. It seemed low to me given the market. I next spoke with another agent at an established, reputable firm. She gave me a number that was fully $90,000 higher. The final selling price was even higher. I'm glad I did not go with my mom's friend, although of course it's impossible to know how it would have played out with her.

This is not to say that it's all about the final price or that you should go with the person giving you the highest estimate for an offer price. It's just to say that going with people you trust isn't always the best thing. I'd suggest you find someone who has a reputation for knowing the "micro-neighborhood" you live in and knows how to sell there. Sure, any agent has an incentive to make a quick sale, but they also have an incentive to maintain a reputation for getting the best prices and making their sellers happy. Good luck and happy retirement!
ncbill
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Re: Selling your home - Is it a matter of trust?

Post by ncbill »

123 wrote: Tue Jan 25, 2022 1:27 am Agents are motivated to sell the house at the highest price because their commission is usually based on the sales price.
Nope.

A Realtor's motivation is to close the deal ASAP.

At only 6% commission (which is really 1.5% for them personally after splitting with their agency & the buyer's agent) they aren't going to go through the effort to keep your home on the market for a slight increase in sales price.

E.g. another $10,000 for you is only another $150 for them.

When selling their own homes studies have shown Realtors do leave it on the market for several weeks longer to get a modest bump in price.
dred pirate
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Re: Selling your home - Is it a matter of trust?

Post by dred pirate »

Carefreeap wrote: Tue Jan 25, 2022 10:33 am
It's a crazy market in a lot of places. Some agents deliberately set a price lower to generate multiple offers. Others will tell you that they suggest setting the price as the last house that closed however due to very low inventory buyers are still making bids over asking.

Good luck!
I have seen this so much around here in NC - my wife shows me listings (we just causally look) and is like "This seems like a good price, right?" I tell her what you just said. The listings she send me are in the 500-600k range - I send her the actually closing price when they close and they are almost always 125-150k more. I would hate to be trying to buy a house right now. We got lucky and bought our current house in 2016 - right before the market blew up.
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