List High To Double End? That’s An Interesting Strategy.
Let me first say right off the bat, that I have no way of knowing if this was the intended strategy, but in Mastermind last week we heard from an agent who showed a house that, by his own estimation, was a bit over-priced. His clients really liked it but they were $50k apart. The listing agent was quite adamant about the price and said that the owner had no interest in negotiating. Our agent said his clients were prepared to play the waiting game. Give it a month, the home was sure to get reduced. But than it sold…the listing agent double ended it….at a price closer to where my agent’s clients were thinking.
The story highlighted our discussion on pricing to get listings. It planted a seed in our minds that maybe, just maybe, an agent would give a price that was on the higher side of the CMA scale in order to get the listing. Well certainly that is well within the realm of possibilities. I mean if you bring in three agents to price your house, and one gives you a price $50K more than the other two, wouldn’t you at least consider going with the higher number? It’s called buying the listing. And while it’s probably not the best marketing strategy, it does put your face on a sign. Of course the other side of the story is that the owner has unrealistic expectations but an agent takes the listing anyway. There are enough stories out there about walking away from overpriced homes but that is probably a discussion for another day.
Then the penny dropped. What if the intent was to eliminate all other buyer agents and then just wait for the call? You know…the one from the person who saw it on Realtor.ca and who’s plan is to only work with the listing agent to score a better deal? Again, I’m thinking to myself, “no, it can’t be. It’s way to risky”. But here’s the thing. There are lots of people out there who believe that working with the listing agent is the best way to win a listing in multiple offers AND get the home at the best price. So I suppose it is conceivable. Sometimes agents agree to drop commissions if they double end (bring in their own buyer) but it is a dangerous tactic for ANY realtor. So many things can go wrong. At the end of the day, representing two people (a buyer and a seller) is actually double the work. Everyone should know that going in.
I still believe that pricing is, in many ways, an art. It’s not just looking at what the neighbour’s house sold for (although that factors into it). There are hundreds of minute details that determine price. It’s something that can’t be learned in a day. My advice…stay on top of the market, wow Seller’s with your knowledge, marketing genius, and sales prowess.
mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.