The dirty little secrets of real estate

By Joel Persinger
YourRealEstateDude.com

Just about every industry has its dirty little secrets that only the insiders know and that are almost never revealed to those outside and certainly never explained to the customer. Real estate is no different.

Just the other day, a friend of mine told me about a lady who had been referred to him by one of his other clients. Apparently, she contacted him to talk about selling her home and was quite concerned about the declining market we are currently experiencing. During the conversation, she quizzed him regarding the level of marketing he would use to sell her home. Apparently, she had spoken to another real estate agent prior to talking with him. As the story goes, she was thinking about hiring the first agent because he had promised to place her home on hundreds of websites and to do much more advertising than any other agent might. To prove his worth, this first agent had claimed to have a track record of selling homes faster than any other agent due to his fabulous advertising strategy.

The dirty little secret is that the first agent’s promises amounted to nothing more than smoke and mirrors. He really hadn’t promised to do anything that most other agents don’t do. Any time a real estate agent places a property for sale in the Multiple Listings Service, hundreds, if not thousands of websites all around the country pick it up and place it on their pages. Claiming the unique ability to place a client’s home on “Hundreds of websites” is disingenuous to say the least.

While it is true that some websites offer additional services by subscription, such as the ability to post additional photos, the simple fact is that the property will appear on the site in most cases anyway, just because it has been posted in the Multiple Listings Service. Therefore, in most cases, the additional marketing that is promised is a fallacy and provides no additional benefit to the client whatsoever.

To illustrate this, let’s take a look at the first agent’s claim that he can sell homes faster because of his advanced marketing strategy. When I asked my friend what his response was to this claim, he said he explained the advertising fakery to the client and helped her understand that price is really what will get a home sold. If a seller prices a property low enough, it will sell quickly. At that, the client told him that she was somewhat disappointed in the first agent because he wanted to list the property for sale at about $50,000 below the latest comparable sale price. It appears that the first agent’s record of selling homes quickly is due to his ability to convince his clients to sell their homes for less, rather than results obtained through his terrific marketing.

Basically, the advertising was a hook. The agent was pulling clients in with promises of advertising while pricing the homes low to get them to sell fast. He told his clients that the homes sold because he did more marketing. But, in truth they sold fast because he priced them well. My grandfather would have called such a person a “snake oil salesman.” So, here’s the truth without the snake oil. If you want to sell your home in this market, you will need to price it low. Hopefully, now that you know that you can avoid the flimflam man and hire an agent who will tell you the truth.