As the reports of an improved real estate market become more prevalent, an age old real estate argument has resurfaced: are you betraying your seller client if you agree to place their home on the market at a value that you KNOW is too high?
Although it may be different in other areas of the country, in the markets that I have always worked in - New Hampshire and Massachusetts - real estate agents operate under Agency Law. Therefore, when we enter into a contract with a consumer to list and sell their home for them (or, as a buyer agent, to help them purchase a home - but that's a whole other issue), we are agreeing to be bound by certain FIDUCIARY obligations including the obligation to put our client's best interest ahead of the best interest of anyone else...INCLUDING OUR OWN.
As someone who takes my fiduciary obligations seriously, I believe that JOB 1 is providing my prospective clients with accurate, and accurately interpreted, information so that they can make an informed decision as to whether or not it is in their best interest to enter into a major, and for the most part, unfamiliar transaction.
If a seller wants to place their property at a list price higher than the market shows it will bear and the agent agrees, are they not misleading that client into believing that the attainment of that price is possible? I think they are. I believe that no matter how much discussion there is about what is going on out there and what the probable sale price will be, once the house goes on the market at a certain price, the seller begins to believe that price is really attainable and they, therefore, end up making all of their subsequent decisions based on a fairytale.
I have recently participated in several on-line discussions about this subject and the agents on the side of taking overpriced listings seem to fall into three categories:
- the, "It's not really my job to help the seller figure out what is going on in the market. My job is too try to obtain whatever price my client wants" group (which, imho, is code for, "I am clueless, I have no idea what's going on in the market so I'm just going to throw everything against the wall and see what sticks");
- the, "I'll tell the seller what they want to hear and take the listing overpriced and then I'll get them to face reality over time, it will take longer and the seller will end up netting less but, at least, I'll already have the listing" group
- and the even more disturbing, "I'll take overpriced listings anytime. I don't really care if they sell. I'll use those overpriced listings to generate other business. They'll increase my signage in the area, thereby generating more listings, and my presence on Trulia, Zillow, etc. thereby generating buyers" group.
Clearly neither of the last two viewpoints expressed even consider the seller let alone what is in his/her best interest (the first viewpoint is just frightening).
Telling the prospective seller the truth when you know it is not what they want to hear, is not the easiest thing to do. It's particularly tough in this market when all the talking heads are shouting that REAL ESTATE IS BACK and flinging about insanely high appreciation numbers. It takes a significant amount of extra effort to help the prospective seller understand that those numbers are national and real estate is local.
Have we had appreciation in this area...YES...but not to the degree that the national news might lead you to believe.
I have lost listings to agents who fall in one of the other groups but I remain steadfast in my belief that my first obligation is to provide the prospective seller with an accurate interpretation of the market so that they can make an informed decision.
If you want, or need, to sell your home in Southern New Hampshire or Northern Massachusetts and would like an accurate assessment of the market, you can contact me at 603-490-5344.