There are a number of topics that your listing agent won’t fully discuss, or can’t explain completely. Here are several “listing agent secrets” that you need to know:
Your home will likely sell to a home buyer who is represented by a buyer agent.
This notion is supported the 2016 National Association of REALTORS® Profile of Home Buyers and Sellers (nar.realtor), which reported that 88 percent of home buyers used an agent to buy a home. The remaining 12 percent of home buyers purchased through other means, including with the help of the listing agent, or even a FSBO. Although your listing agent may claim to have sold the most homes in the neighborhood, the truth may actually be that they are only facilitators. The buyer agent who actually “sells” the home is labelled the “selling agent” by the industry.
The size of an agent’s brokerage or team, or even the number of homes they list and sell may actually be detrimental to your home sale! An empirical study by Shiawee X.
Yang and Abdullah Yavaş (Bigger is Not Better: Brokerage and Time on the Market; The Journal of Real Estate Research; 1995, Vol. 10, No. 1, pp. 23-33) reported the following results: 1) The amount of agent’s commission is not indicative of your home’s time on market; 2) The size of the listing firm does not affect your home’s time on market; 3) Homes listed and sold by the same firm (i.e., dual agency) does not reduce time on market; 4) The more active listings your agent has, the longer your home may sit on the market (because they do not devote to the time to your sale). Yang and Yavaş suggest that the larger the listing firm, the more incentive to “cheat” days on market by circulating new listings within the firm before entering it in the MLS, which also increases the chances of a dual agency situation. “Private placement,” or pocket listings can have similar dual agency results.
Chances are that your listing agent doesn’t totally understand dual agency, and therefor may not be able to explain how it affects your sale and potentially your sale price. The Maryland Real Estate Commission’s “Understanding Whom Real Estate Agents Represent” disclosure states: “The possibility of dual agency arises when the buyer’s agent and the seller’s agent both work for the same real estate company…The real estate broker or the broker’s designee, is called the “dual agent.”
Dual agents do not act exclusively in the interests of either the seller or buyer, and therefore cannot give undivided loyalty to either party. There may be a conflict of interest because the interests of the seller and buyer may be different or adverse.” Dual agency can affect your home sale price. There are a number of empirical studies that indicate conflicts of interest and other issues that arise out of dual agency. But a study by Joachim Zietz and Bobby Newsome (Agency Representation and the Sale Price of Houses; Journal of Real Estate Research; 2002, Vol 24, No 2 pp. 165- 91) found that a home’s sale price drops about 3.7 percent when the listing and buyer agents are from the same firm. They stated: “…the fact that buyers may obtain a lower price by engaging a buyer’s agent from the same firm as the listing agent raises the issue of whether or not the listing firm is shortchanging the seller. The evidence appears to suggest that the agency relationship between seller and listing agent may be compromised.”
Dan Krell is a Realtor® with RE/MAX All Pro in Rockville, MD. You can access more information at www.DanKrell.com.