You might want to re-evaluate automatically hiring the self proclaimed “Neighborhood Agent” to sell your home. Just because they live in the neighborhood isn’t reason enough to hire them, as they would have you to believe, and most certainly doesn’t mean they are your best choice. Here’s why.
1. Neighborhood Bias
Give caution to the one agent suggesting a much higher list and potential sale price; it’s likely the ‘neighborhood agent’. Contact 2 or 3 agents for brief individual meetings, allowing them to see your home and gather pertinent information in order to best prepare a detailed CMA (Comparative Market Analysis). During your second meeting ask each agent to explain how they arrived at the suggested list price, the anticipated sales price and if it’s based on a 60, 90, 120 day sale or longer.
Also, each agent should present a proven marketing plan, their past 12 months sales transactions including their sales to list price ratio, in addition to any homes they marketed that either expired or were removed from the market and did not sell. Comparing their track records will prove to be highly beneficial to refer back to before hiring your agent.
2. Motivation – Time is Money
When it comes to selling our largest asset we want both; to sell it for the highest price, of course, and sell in the least amount of time as possible. The ‘neighborhood agent’ is also a nearby homeowner too. There could be motivation to insure that his/hers own home value increases, and could suggest listing your home significantly higher price than the current market value of sold comparable homes.
Statistically, the higher above market value a home is listed for, the longer it stays on the market. The longer a home stays on the market, typically the less money it sells for. Sure there is always a slight chance of receiving an offer when the home is overpriced but most often it doesn’t happen.
Downside to Overpricing Your Home:
- Buyers compare your overpriced home to others on the market; essentially you’re helping them decide ‘the other home they like’ is a better value. (The competing home sellers are very thankful)
- Buyers begin to wonder what’s wrong with the home when it’s been on the market longer.
- Buyers typically offer less money the longer a home has been on the market.
- The hottest selling season is over which results in smaller pool of Buyers
- Less Buyers can equate to even more time on the market.
- Agent receives more sign and name rider exposure and advertising.
3. Glass Bubble with a Revolving Door
Unfortunately, listing at a higher price for 45 days and then having to reduce the price means starting all over again with yet a different set of ready and willing Buyers. The longer your home is on the market, the harder it becomes to live in ‘the glass-bubble’ with the revolving door of buyer showings interrupting dinners, homework, kids bedtimes, etc. Sometimes, the Seller’s motivation changes after a few months on the market. It’s a lot of work for the homeowner to keep a home in showing condition and available to see at all times. It’s not uncommon to become frustrated after wasting 45 days being overpriced, let alone the interruptions to the entire family when accommodating showing times. Pretty cushy for the ‘neighborhood agent’ to have longer name exposure in the neighborhood by the yard sign but not so cushy for you or your family.
4. You Gotta Do What You Gotta Do
What if you become dissatisfied with their performance? How uncomfortable is it going to be firing your agent that is also your neighbor, your friend or both. That rates up there with having to fire a family member!
Selling a home is strictly a business decision… you gotta do what you gotta do! You’ve got to hire the best for the job, one who will ‘shoot you straight’ and one who has no self serving interest except to do the job you hire them to do.
A full-time ‘Neighborhood Agent’ should have sold many homes right? Wrong! I can still recall the time I saw 5 or 6 signs in the neighborhood, all listed by the self proclaimed ‘Neighborhood Agent’. Curiosity lead me to search their history and what do you know…they had not sold a home in our neighborhood or anywhere else in over a year!
If you are buying or selling a house and are looking to hire a successful real estate agent to help you through the process, take a look at AgentHarvest's list of top-ranking local Realtors in your area. We found these agents by examining their sales track records, awards, rankings, client testimonials and by conducting personal interviews.
You made a good point about the importance of looking into how many homes a real estate agent has sold when you decide to work with them. Finding someone who has not only sold many houses, but sold many houses recently and in the same area would probably be very beneficial to you. My sister has been thinking of selling her house so I’ll pass these tips on to her. Thanks!