Agent A or Agent B: Who Should List My House?

If you could be a fly on the wall, listening to a coffee break group of Realtors, you might often hear "war stories" of how they lost a chance to list a property because another agent promised to sell the owner's home for more money than any other agent did. It's referred to as "buying a listing" in the trade.

There is a basic fallacy involved in such a situation: no agent can "make" the buying public pay more for a property than any other agent. The real estate market does not place price stickers on the side of a house or condo building, expecting the consumer to pay the marked price. Just the opposite is true: the CONSUMERS will determine the selling price of a property.

When an owner decides to sell his/her home, it is common for that owner to meet with one, two, even three agents to determine which of them is best prepared to list and sell the property.

For the owner to decide which agent to hire, based on the anticipated selling price that each agent might promise to deliver, is faulty logic. Why? Again - the CONSUMER will determine the value of the property, and therefore its selling price. But far too often a seller chooses Agent A over Agent B, because Agent A states "I can sell your house for $500,000!" Agent B, however, states "Your home WILL sell for $470,000." So the owner thinks "Hmmmm, this seems to be obvious; I should hire Agent A because I will gain that extra $30,000 by doing so."

This is how that listing typically plays out; owner hires Agent A, and lists the house for $500,000, perhaps even $510,000. The first week on the market, agents come to the brokers open house to view it, and report back to their buyer clients "This house is overpriced. We'll wait for the price to be reduced." The first public open house attracts some curiosity seekers, but does not generate an offer because the price is too high for the property's true value. One week passes, then two, then three, and the private showings have dried up. Agent A says to the owner, "We should consider a price reduction! Nothing is happening!" The owners says "Gee, ok, but not a big reduction, because we expect to sell it for the $500,000 you promised us." So the price goes down by $8,000. Another week, or 2, or 3 go by. Repeat. And so on. A highly qualified buyer who loved the property made a reasonable offer, and was rejected by the seller. The buyer found something else to buy the next day, and closed on it in 3 weeks.

Eventually the price is reduced to $469,000, and finally an offer is made on the property. It sells, finally, for $459,000 after six months on the market. The owner in the meantime has been paying the property taxes, utilities, insurance, mortgage, fixed the hole in the roof, the leaking water pipe in the front yard ($4,000 repair bill), and so on.

When the selling price is recorded in the multiple listing service, the agent who did not get the listing looks at the $459,000 number and can only sigh.