Buying Listings

San Francisco real estate has finally seen an uptick in homes for sale (called inventory by real estate agents). It seems sellers are finally ready to sell after hanging onto their homes waiting to eke out every last cent of appreciation before "cashing in".

But more homes and slowing buyer demand means seller's can't expect multiple offers and crazy over-bidding.... yet they do expect that anyway. And one ugly trend, (if a trend can be 3 instances I've personally been involved in) is agent's who "buy the listing". "Buy the listing" is real estate speak for an agent who tells the seller he can get 10% to 20% more than any other agent said. For example, I think a condo will sell for about $1 million, but another agent says he can get the seller $1.2 million. When you look at the comparable properties that have sold in the last 6 months, not one property went for more than $1.1 million, and that one had several nicer features, and was a tad larger. So how will the other agent get $1.2 million for them? The answer is that he won't. But seller's often get swayed by his assurances, and when only one offer of $1 million comes in, they accept it because they can't afford to go through another re-listing period and waste another couple of months.

To me this is unethical and I would never "buy" a listing. But after losing 3 listings to this tactic, it's clear sellers must be warned against this sleazy behavior. Every seller should interview at least 3 agents, and probably more. If one agent quotes a price well above everyone else, the seller should be prepared to ask for proof. You will really WANT to believe him because it means a lot more money in your pocket. But you must try to look at the information objectively. If only one other home sold for as much as this agent is quoting you, ask yourself if your home really is as nice, or as large, or has as many features. Drive around and look at the other homes too. Try to be honest with yourself, would you really pay the higher price for your current home when you could have all of those extra features for the same price? Of course not! Only a dumb - or - desparate buyer would. But buyers have more options now, so they are not desparate, and since such an expensive purchase is almost always the most important financial decision of their lives, you can bet that there is no such thing as a dumb buyer. So don't be a dumb seller - kick this unscrupulous agent out of your house.

Instead of letting an agent "buy" your listing, hire the agent with the best marketing plan, who you have the best rapport with, and you instinctively trust.