Most of the time when I meet a seller, they love their home. Maybe it was the first place they ever owned, or the place where their child took their first steps. It might be all they could afford once upon a time, or maybe they bought in the neighbourhood they grew up in.
Selling your home is an emotional time, and it’s also a stressful time. As you prepare to move on to your next adventure, you want to get top dollar for your current property. And, unfortunately, this is where some unscrupulous real estate agents have been preying on people’s emotions.
While you have an emotional attachment to your home, your buyers don’t. They should be giving your home a fair market appraisal and offering you what the home is worth.
The same goes for your realtor. This individual should tell you what the home is worth so you can make a quick, relatively painless sale.
Sometimes, however, certain realtors will tell you the home you’re selling is worth more than it actually is. In the industry, we call this ‘buying the listing’. Why? Because they are promising you a bigger payday than you will receive.
Consider: would you choose the realtor who tells you the house is worth $500,000, or the one who says it is $420,000 at best?
“But surely,” you say, “if the house doesn’t sell we can just reduce the price?” If you have the time, you can wait and hope to get the actual market value price for the home. Or maybe you’ll get lucky and find a buyer who becomes emotionally attached to your property and overpays. But time is often not on your side as a seller.
What these realtors know is that once you sign with them, you’re not likely to dump them in favour of another realtor. They are paid on a percentage commission so, yes, a price reduction does affect how much they earn. But those real estate agents have your listing, and (at least in the short-term) no one else can take it from them–so they are getting paid either way. Meanwhile, your move plans might be getting held up or you might be taking on additional costs to hang onto this property which should have sold.
So, what can you do to combat ‘buying the listing’?
- Look at the comparable properties in your neighbourhood and what they have sold for recently. Consider age, condition, how the amenities compare (Double car garage? Pool? Finished basement?), and whether any changes have occurred in the neighbourhood recently that might positively or negatively affect your value.
- If you know what your house was purchased for, and if it was purchased recently, you can look at the average appreciation rate to help get you in the right ballpark. Kingston properties are currently appreciating at a rate of about six per cent a year, with neighbourhoods like Rideau Heights seeing the highest appreciation.
- Get ‘second opinions’ and ask each realtor how they arrived at the price they are recommending to you. And if a realtor is trying to make you commit to a long-term agreement, ask why.