Considering most homeowners will sell no more than two homes in their lifetime, it’s no wonder why most homeowners seek out an experienced and knowledgeable real estate licensee to help and guide them through the complex process of laws and regulations. This real estate licensee is hired to act as the homeowner’s fiduciary agent through the process of listing, marketing, selling and closing the purchase transaction. Per the National Association of Realtors 2018 Profile of Home Buyers and Sellers, they report that 91% of homeowners used a Realtor to help sell their home. Sadly however, not all real estate agents or Realtors for that matter are the same and some are using unscrupulous and immoral techniques to win your business. This article is going to focus on one of those techniques to educate the consumer so that they can avoid falling victim to these less than reputable practices.
In the industry, the scam we are going to talk about is called “Buying the Listing” however, it has nothing to do with really “buying” anything. What it refers to is the illegal and immoral practice of convincing a homeowner their home is worth more than it is in order to win the listing agreement.
Many homeowners want to believe their home is a small gold mine. This is because for those same homeowners, the home is the lion’s share of the economic health of the family. Many of you reading this article can relate because you find yourself in the very situation I’m describing. You don’t have any retirement to speak of and savings is just as meager, you’re living paycheck to paycheck and any disaster could put you and your family on the road to ruin. The only saving grace you have is that, you are sitting on equity in your home and as such, the home’s equity forms the only foundation you have to economic security. Essentially, all your nest eggs are in one basket and you not only want the home equity to be a small gold mine but, need it to be without exception. This is exactly where a self-serving immoral real estate agent wants to find you.
The agent scam practice of “Buying the Listing” involves winning your business by telling you that they can sell your home for more than anyone else can. Of course, such promises are all the bait this agent needs to reel you in for the previous reason we outlined in the above paragraph. This deceitful agent has no real interest in selling your home because he knows it’s overpriced but, that’s not his goal. His goal is to use your listing to generate lead traffic from his sign, syndication, radius mailing and other marketing he may do. Having a presence in your neighborhood allows him to market his services to your neighbors by touting the fact, you trusted him to list your home and they should too. It’s called Social Proof Marketing Psychology and make no mistake, it works.
At the end of the day, he may end up burning his bridge with you but, in his mind, that’s the price for getting his foot in the neighborhood’s door. The fact is, he may never sell your home and that’s ok. Your home may end up on the market for longer than expected or, you constantly had to do price drop, after price drop however, as his sacrificial lamb that’s to be expected. He’s more than willing to overprice your home and never sell it for the multiple closed transactions and sales leads, he generated directly off your listing. He will play on your fears and economic situation and you will be just another victim of something we call, “Buying the Listing”.