The single biggest mistake that real estate agents make has the potential to ruin their reputation and their business. The funny thing is that they probably don’t even know they are doing it. The reason they don’t see it is that they are looking at their business wrong, and as a result they are missing a bunch of business (and a chunk of money).
What I’d like to do is be open and honest about the mistakes I see real estate agents in my local area making. First, a couple of caveats: I’m no agent, realtor or broker. I don’t work with any companies in the industry and am a commentator on it. I’m writing from the perspective of a client, and want to share my experiences in the hope that what I see happening to the detriment to the local market stops.
The biggest mistake that real estate professionals make
One of the biggest errors that I see time and time again jumps out at me almost every time I see real estate marketing material. The irony is that the mistake is almost always made in an attempt to make more money for the listing agent – but it achieves the reverse. Instead of making sales, potential property buyers are actually driven away from anything that the agency has to offer.
I’m talking about price. The listing price is everything, a very important number. Let’s be clear though that this price is not altogether linked to the actual value of the property. The listing price is something different, but that’s for another article.
With the reduction of property values, inventories are lower and sellers who are actually in the market now really want to sell. So putting properties on the market at prices which don’t reflect the drop in values is completely counter-productive. It’s not half obvious either, as properties listed by other agencies in the area are listed at obviously lower prices, which are realistic and reflect current values.
Higher listing prices drives business away
As a potential buyer I will do everything I can to avoid an agent who has high listing prices. I’m not saying that I want bargain prices, everyone knows that the final price paid for the property will be subject to negotiation. What I want to see when I see a property listed is a price that reflects a fair appraisal – not a generous appraisal designed to make the seller happy to list with that particular agent.
Real estate agents need to think carefully when coming up with a listing price. Remember that that you want to attract buyers, sell properties and earn commissions – that’s your core business. If you do this well and efficiently then you will earn more referral business, make more money and have a successful business.
If, however, you choose to list properties at inflated prices that do not reflect the fair current market value, but rather a wishful thinking type figure – you’re doing yourself a dis-service. Be honest with your clients, the people that list with you. Tell them the truth about current market conditions and the list price that will attract potential buyers.
Finally, remember that every listing is a reflection of your business, your morals, and your skills. If your listings don’t reflect positively on your business, your business will suffer. Simple really isn’t it?