At the end of the day, so many agents gear their business toward getting listings. Most come up with elaborate listing presentations that detail how the client’s home will be circulated on hundreds of websites, how it will be shown internationally, how it will be shown in 30 languages, and so on.
Now I'm not saying every listing doesn’t need professional photos, a detailed write-up, accurate measurements, an accumulation of relevant documentation, and so on, but every listing needs to be properly presented and marketed.
The problem comes when agents start to promise sales numbers that are well above market price. In the competitive drive to get listings there are always a few who seem to “buy” the listing. Buying a listing prays on sellers’ own greed and need to believe their home is special and worth more than the market price. It's a matter of feeding the sellers what they want to hear, not what is true.
A few years back, I did a competitive market analysis (CMA) for a couple who wanted to be close to their grandkids, off Salt Spring Island and because she had early dementia, they stated they just wanted to sell. My CMA gave them an accurate suggested list price of $1.2 million for their 4,500 square-foot builders-grade waterfront home. The sellers told me other agents who came in after me said they should list for $2.4 million. They settled at $1.8 million and listed with another agent. Nine-hundred and fifty-four days later, and with a list price of $1.25 million, the home sold at $1.1 million.
It's not as if over-pricing is the only tool in the agents’ tool bag – they can also manipulate the market statistics by re-listing a home. The home in the above paragraph was re-listed and sold as a “new” listing with 56 days on the market and within 10 per cent of asking price. This totally throws out the market statistics of an area. It's painting a picture that’s not truthful.
There are no rules that I know about that preclude agents from over-pricing and or re-listing and/or both.
As a profession, real estate agents are selling trust, expertise and honesty to the public. However, we let a few unscrupulous agents continuously abuse the system and get away with it year after year. As agents, we are bound by our code of ethics. We can never say so-and-so is the queen and or king of over-listing/re-listing.
One simple thing CREA and or local boards could do to stop this unscrupulous practice is to implement aggregate days on the market. Once a home is listed on the MLS the days on the market should run with all the listings. No matter if they re-list with the same agent or another agent. It would force sellers to really think about stigmatizing their homes with big promises by unscrupulous agent.
It only takes a few bad apples to make all honest, hard-working sales reps look like sleazy used car salespeople, who might not think rolling an odometer back is such a bad thing. There has to be more truth in our advertising. A new listing should actually be a new listing.
“List and you will last” is an old myth perpetuated in so many “how to become a Realtor” books. So much of the industry is built on getting listings. The more listings an agent has, the more times they will be on the MLS and, presumably, the more calls and or emails they will receive.