Hi, I recently had out of state friends interview several realtors to sell their home. They asked me for advice about which questions to ask them, what to watch out for, etc. Long story short, the husband asked me if there’s a way to analyze the agent’s sales to see how well they perform. I initially told him, no, but after thinking about it, I changed my mind.
I’m curious to see if others have come across the same problem and/or if it’s a problem that could be worth solving.
Here’s my thinking…
When searching for an agent to sell, most people will look at online reviews or ask friends/family for referrals…the most obvious reason for this is trust/reputation. But the problem is that online reviews can be easily manipulated, and while a referral from a friend/family member can be great, it doesn’t mean the agent will have the seller’s best interests – but looking at an agent’s transaction history can.
While there are plenty of great agents out there who won’t risk their integrity, there are a bunch of shady ones who will…and it’s not easy for the average consumer to tell which agent is which.
For example, many agents are notorious for overpromising how much they can sell a house for and will intentionally suggest an inflated list price to get the seller to sign the listing agreement. Analyzing an agent’s sold to list price ratio and comparing it to the average agent in the area can show who these agents are…so can analyzing their percentage of homes sold under the asking price.
That same approach can be used in the opposite direction. Some agents will intentionally suggest a list price well below market value so that after the house sells, they can market the house as, “Just sold for X over asking!” This can hurt a seller because some buyers won’t pay a certain amount/percentage over the asking price.
Another example that is used by many agents who sell a lot of homes is representing the seller and buyer in the same transaction. Many of the top agents prioritize this and have a system in place that minimizes the exposure of the home they’re selling to increase their chances of also repping the buyer so that they get 2 commissions instead of 1. In many cases, the house sells for less than market value but the seller is happy because they got a buyer and weren’t fully aware of what their home could really sell for. Analyzing the agent’s sales to see how many times they do this compared to their total sales can tell who these agents are…and you could take this a step further and see how many of these were sold below the asking price.
These are just a few examples, but I guess the point is this…listing agents use shady tactics for their benefit that most consumers have no idea about. I think there is a way to determine which agents are good and which ones are bad by analyzing their sales history.
If you were looking for an agent to sell, would you find this information valuable?