According to the book Freakonomics, written by Stephen Dubner and Steven Levitt, real estate agents sell their own homes for 3% more compared to what they get when they sell their client’s houses. The authors suggest dishonesty and double-standards as the reasons for this finding, but I think there’s a more honest reason why Realtors may be able to get a higher selling price for their homes compared to their clients’.
Many Realtors disagree with Freakonomic’s findings, swearing that real estate agents do not sell their homes for a higher price. I am not going to question the book’s findings; instead, I’m going to tell you why their findings SHOULD be true. Realtors should be able to sell their own homes for more than their clients. Think about it. When a real estate agent sells his/her own home, they have a highly-qualified agent, a realistic seller, and a perfect home to sell. How can they not sell it for more? Let me explain…
The Perfect House
While real estate agents are looking for a home, they also consider the house’s sale-ability. Realtors look for attractive properties, good schools, and great neighborhoods. They steer clear of houses that would be hard for them to sell later on. Lots of agents I know also keep their homes updated and make some form of improvement each year that helps to increase the property’s value. When real estate agents decorate their houses, they pick out colors or features that maintain or increase the house’s sale-ability. When agents sell their home, they know how to prep it for the sale. Agents will help you prep your home too, but how much of their advice do you usually follow?
The Perfect Price
Real estate agents are realistic when it comes to pricing their home to sell. If they are serious about selling their house, they don’t set their sales price unrealistically high. Realtors know the acceptable market price range that their house will sell and they set their price in that range. Their sales price should be competitive to all of the other comparable houses in their neighborhood and the house should have more sellable features than their non-Realtor neighbors’ houses. When you think about your house’s sales price, are you thinking about it from your perspective or the buyer’s? The buyer doesn’t care how much you owe or how much you spent remodeling it. Their only concern is how it compares to the competition.
Timing The Sale
The best time to sell your house is when you want to, not when you need to. When real estate agents want to get the best price for their homes and they’re not in a hurry to sell, they wait for a seller’s market. Even in a seller’s market, certain months are better than others. Spring and summer are the best times to sell and naturally winter is usually the worst. Realtors, who can wait for ideal market conditions, take all of these factors into consideration when they decide the best time to sell.
Taking A Risk By Holding Out For Better Offers
When you play “hard-ball” trying to maximize the negotiated offer, you stand a good chance of having the buyer walk away from the deal. If that happens then you’re left with nothing. Waiting for better offers has its share of risk. What if those better offers never come? What if it takes months to get the next offer? What if all future offers are less than the original offer? That’s a big risk to take and pressing too hard almost always leads to disaster. Real estate agents know that the longer the house stays on the market, the less money they can sell it for. Real estate agents have a duty to act in their client’s best interest and that agent must weigh the risks verses the rewards of holding out for better offers. Most agents are not comfortable putting all their client’s chips on the table to risk losing the offer just to get a few thousand dollars more in sales price.
Realtors may be inclined to be more risky with their own house. They know the odds and may be more willing to risk losing what may be their best offer. It’s a gamble they may be willing to take, but hesitate to recommend. Think how mad you would be if, while holding out for a few thousand more, your agent lost the best deal you had, forcing you to wait for months to eventually accept a much lower priced offer.
If you consider all of these factors then I think you’ll agree that a real estate agent should be able to get a higher sales price for their own property than they can for yours. If they can’t do a good job selling their own house, how in the world could they possibly do a good job selling yours? That’s why it’s so important for you to choose from among the best agents that have a recently proven track record in your neighborhood. Be sure to interview at least three agents and compare what they have to say. Find the agent that can help you get that additional 3% sales price. AgentHarvest can help you find those top producing agents in your neighborhood.