The other day I was talking to one of my friends in the real estate industry. It had been a while since we’d last spoke. I asked him how he was doing, and how his business was doing. He said that things were great, but it seems like every year he gets one client that ends up hating him during a transaction. I found this remark odd, because this real estate agent is one of the best real estate agents I know. There have been many times when I’ve been in a tight spot and asked him for advice.
Apparently, his client lived in a different state and wanted to sell a home here in St. Louis. The home was not unoccupied. A member of his clients family was living in the house, but the combination of payments and general maintenance and upkeep had become too much.
Pricing your home for sale can be difficult. My agent friend physically viewed many houses currently for sale in the area and had a very good sense of the market when he discussed the asking price with his client. He said that the house should sell for just about $500,000. The rationale was that while this home was very nice, this would be at the very top of the price range and other homes that had come to market tended to sit at higher prices. The client wasn’t happy with the $500,000 asking price and said that the house should be listed for $600,000. His rationale was that the market was hot and that someone would like the house because he had lived in it. This is a rationale I hear more often than I’d like to. It’s a bias that we all have. Because we own it its worth more than if someone else in the marketplace did. It has been my experience that no one cares who lived in your house.
The owner of the house agreed with my agent friend and signed the listing agreement. By law, a listing agreement is required to have the asking price filled in. The client agreed to list the house for $500,000.
The house went on the market and was under contract within a week. The client and agent were both thrilled. Then, something odd happened. The seller started getting more and more angry as the closing date arrived. Just before signing the paperwork at closing, the seller called my friend screaming and cursing at him. “You sold my house for too little, I’m going to sue!”
What happened? Why was the seller so angry? The agent had priced the home correctly, and confirmed pricing with the seller before listing the house for sale. It’s very likely that the house would not have sold at the $600,000 rate and that at that high of an asking price; the house would just sit on the market until there was a significant price change. This is an example of doing everything right as an agent and still not being appreciated by the seller.
What could the agent have done differently? I don’t think that the agent could have done anything different at all. There are all sorts of people in the world, with different values, and different opinions. Sometimes, we just run into people whose views run counter to ours and there isn’t a way to get on the same page. This story is one of the reasons it’s hard to be a real estate agent. We can do everything right and still not have clients pleased with our effort.