Every industry has its share of unprofessional representatives. We usually tend to attribute these stereotypes only to car salesmen, lawyers, and loan sharks. Sadly, the real estate business, like so many others, also has a few roaming the streets. They are the ones who got their license to make a quick buck no matter the consequences. Don’t Let A Lazy Agent Undersell Your Home!
Fortunately, these “Lazy Agents” are easy to spot early before you get trapped into a bad deal. Their bad habits give them away, if you know what to look for. If you are a seller, the most obvious is advising you to drop the price of your home. This is known as underselling and is one of the worst pieces of advice any agent can give. A good agent knows the value of your home and has done the research to be sure you price your home correctly for today’s market.
Here in Colorado, the real estate market is booming! Homes are going fast with almost every sale closing at above the asking price. In a market like that, there is no reason to put your home out there for anything less than top price for your area.
“But if that is true”, you ask, “why would any agent advise a deliberately lower price?”
Put simply, the agent is trying to start a bidding war; the ultimate bait-and-switch. Buyers don’t want to pay any more than they have to and will jump on a low price like sharks on chum. Not only does this create a mess and headache for you, but there are a few other problems to it as well.
To better understand why, it is important to know about comparables. Comparables are the average price for a home with similar square footage, type, and finishes sold in the last six months in your development. If you are selling a 2 bed/2 bath ranch, then Comparables would be nearby 2 bed/2 bath homes that may or may not be a ranch, but will have close to the same amount of space. A reputable and honest agent will inform you of the true value of your home.
To make an even quicker sale, the lazy agent will tell you to set your asking price at $40k to $50k below the average amount that other comparables have sold for and while you may start getting offers in a few hours, they won’t be the kind offers you want for 3 main reasons:
Good Real Estate Agents Know the Market
Good Agents know the market and will spot someone trying to undersell a house instantly. They know that the house is in the hands of a disreputable agent trying to start a bidding war that they don’t want their buying clients to get mired in.
While bidding wars certainly shoot the price of the house up dramatically, the initial low asking price creates unrealistic hope in the buyer; especially when the bids quickly outclass their budget. A buyer caught in enough of these wars will soon stop looking and the market loses good buyers.
You Will Be Quickly Inundated With Unqualified Buyers
You, the seller, will be quickly inundated with unqualified buyers. Offers will come in left and right from people who wouldn’t be looking in the price range of your house if it was correctly priced. This means that you will be showing your home, with all of the hassle that entails, 4 to 5 times more often than is necessary; often to people who are unable to compete in the bidding war without knowing it. In the end, you have more stress and the buyers get more disappointment.
Bidding Wars Can Backfire
If you get unlucky enough that the bidding war backfires (which it often does), you’ll end up selling your home for much less than the current market value. To make matters worse, you’ve effectively dropped the value of comparables around you; which means that your neighbors, who you may be great friends with, now have lower property values for the next six months or more. Talk about a quick way to burn bridges!
Don’t Let A Lazy Agent Undersell Your Home!
The bottom line is that letting a lazy agent convince you to undersell your house will cause you stress, make you work more to sell your home, and, in all likelihood, lose you money. Underselling only benefits the lazy agent. Think about it… if this tactic was effective, it would work with all high priced items like cars. Stay away from the used car salesmen of the real estate world. They are easy to spot and not worth your time.