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5 Reasons Agents Avoid Private Sellers Like the Plague 

 

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I’m saddened by an unfortunate experience with my clients.

And it happened because of the four difficulties that come from working with private sellers.

I share the story to encourage or equip agents when dealing with private sellers. Or perhaps to advise them to think again. I also share this story as a warning to sellers so they can experience success instead of loss.

Recently, a lovely young couple asked me to help them find a very specific kind of property. As soon as they described what they wanted, a property came to mind. It was a perfect fit. There was just one problem. It wasn’t listed.

I remembered though, that the owners had wanted to sell it in the past.

Allow me to stop here to tell you that I have helped my clients purchase for-sale-by-owner properties before. Every one of those experiences was painful either for me, my client, or everyone. So I wasn’t altogether excited about repeating the process. Still, the property was absolutely, completely, irresistibly perfect for my buyers. So I approached the owners. Perhaps they were still interested in selling.

They were.

What soon followed were four of the biggest, and most common, reasons that I, and many other agents, would rather avoid working with private sellers.

Five Reasons Agents Avoid Working with Private Sellers

 

Working for Free for Strangers

The thing about private sellers is that they don’t know what they don’t know. Like their house value for starters. How do they know any offer an agent would bring would be fair? The buyer’s agent often ends up educating, advising, and even assisting the seller without any compensation or even appreciation.

In one case, I advised a seller to get an appraisal. But I sure wasn’t about to do it. Conflict of interest much? In the interest of transparency and unbiased fairness, (and helping move things along for my buyers) I arranged and paid for an appraisal out of my own pocket.

Not only was I not compensated for the expense or even thanked for going the extra mile to be very clearly on the up-and-up, but I was treated with contempt for it. Unfortunately, this is a common thing with private sellers. Which brings me to the next point.
Being Treated Like a Slave

There’s the working for free mentioned above, and then there’s slavery.

For some reason, people think a buyer’s agent should work for free. This is especially true for private sellers.

One couple who had once upon a time listed their house, built in a 5-6% commission for the selling agent. When I approached them with a buyer, they fought with me about payment, insisting I should get nothing for brokering the deal.

Basically, they think they can bully agents. There’s no relationship – not a personal one, and most certainly not a professional one.

 

Being Treated Like a Murder Suspect

Private sellers tend to treat buyers’ agents like they’re selling mismatched knives out of a trunk.

I’ve stood on the front stoop in winter, without being invited in, and explained how my buyer wants to buy their house, only to be looked over with a raised eyebrow. Do they think I’m trying to trick them out of the deed to their house?

One time I presented my buyer’s conditions, one of which was a satisfactory water test. I even did the sellers a favor by furnishing them with the sample kit. Their response? Accusation.

“You’re just doing this for the buyer’s advantage!” they said.

But it’s  a standard requirement from the bank. They won’t even fund a mortgage without a water test having been performed. Besides that, I’m not actually a selfish creep who’s out to get you. Everything I do, I do for the benefit of both parties. Thanks for the implication, though.

Look, I can understand why sellers would feel guarded and protective. Between all the door-to-door scams, robberies-by-phone, and fraudulent emails happening these days, a person needs to be careful.

But that’s what seller’s agents are for – to protect sellers from any creepy, horrible, out-to-get you agents who try to bring buyers for your house.

 

Directing a Soap Opera

The thing about dealing with people is that everyone is dealing with something. Maybe they’re selling because of a divorce, or illness, or even death. Maybe there was a job loss and the financial situation is critical. Maybe the couple just doesn’t agree on anything, including the price, or whether to sell at all.

Wading through those waters is generally the seller’s agent’s role, and we’re happy to come alongside.

When there’s no seller’s agent though, there is no buffer between the seller’s drama and us, the buyer’s agent. Suddenly we have to navigate the personal stuff on both sides of the boat. It’s tricky, it’s demanding, and actually it’s pretty doggone impossible, given the previous three points.
The Biggest Deal Killer of All

This one’s not specific to private sellers, but they sure can sport a streak of it. The biggest deal-killer? Greed. Too many deals have fallen through and houses lost because of plain, old fashioned greed.
In one case, my buyers had offered the private seller Thirty Five Thousand Dollars more than the appraised value of the place just because they wanted it so badly. The seller’s response? They wanted more. They wanted an additional Twenty Five Thousand Dollars.

Allow me to gaze into my crystal ball here for a minute and tell you what’s going to happen to them and anyone else who overestimates the value of their house and refuses to accept less.

Ah, yes. I see it. A cloud looms in the distance. The house stands alone and sad looking, its original owners pining for the money they will never, ever see. Oh, and there – I see the banker raising an eyebrow in confusion. He shakes his head and snickers at the idea of lending more than a property is worth.

As long as sellers insist on getting more than a fair, sensible, and realistic price for their properties, deals will continue to die at the feet.

 

Sadly, the young couple I represented fell victim to some of these private seller behaviors. My buyers were respectful, flexible with the seller’s schedule, accepting of the seller’s terms, and even generous with their offer but, as often happens, the deal fell through. They were unable to purchase their dream property.

The not surprising final outcome.

My buyers found a much more appealing home that offered them way more value for their dollar. They have moved in and enjoy their new space.

The seller listed their property and eventually sold it for less than the offer that my buyer wrote and they paid a full commission for the sale.

 

The Real Truth about Free Home Evaluations (And Why I Only Give them to Clients Now)

not free
The banker adjusted his glasses as he looked over the couple’s finances.

“You’ll need an appraisal,” he said, setting the papers down, “every mortgage requires an appraisal be done.”

The woman asked, “Where do we get that done? And how much does that cost?”

“Appraisal companies charge a few hundred dollars,” he said. Then he leaned forward and smiled. “But you don’t need to bother with that. Just call a real estate agent. They do them for free.”

The couple left the bank, delighted to have saved a few hundred dollars. They did not ask or wonder why one person would do hundreds of dollars of work for free and the other never, ever would.

Somewhere, moments later, a REALTOR’s® phone rang…

 

Real estate is this weird industry where people expect highly trained professionals to work for free (or less).  It’s not just family and friends either, like you might experience in your job – it’s this broad expectation from all of society – bankers, lawyers, buyers, sellers – that real estate agents can and should work for free.

For over seven years, I was that REALTOR® getting the call for a free home evaluation. (thank you, Mr. Banker, sir. May I have another?)  I’d eagerly take the call, invest the hours, drive all over tarnation, and tromp through snow and mud – and all for free. It took me a while to realize I don’t actually have to do that to myself.
Why It Used to Be a Good Idea

In fairness, free home evaluations are a valid way of drumming up business.  It was a great way to meet people who were interested in buying or selling houses, and start a conversation about their needs and how we can help. We could even demonstrate how reliable and effective we were before asking to represent them.

 

Why It’s Not a Great Idea Anymore

Things have changed. (They always do)

What was once unique and creative is now commonplace. That means a few things:

  • It’s so common it’s actually an expectation. Why pay when you can get the milk for free? It makes a person wonder if it undermines the level of professionalism realtors could otherwise be known for. If realtors were a house on a city block, would their being free make them the cheaper house, or the high-value, more desirable house, for example? Something to think about.
  • People who have REALTOR® representation will still use another agent’s free home evaluation offer. Why? Because they don’t want to “bother” their own agent who they’re paying. It’s more courteous to make some other random agent work for free for no benefit. I know it doesn’t
    make sense. I also know it makes no dollars.
  • Marketing is about standing out. Doing what is common does not stand out. I’m learning that the more I do things others don’t, the more I set myself apart. (Blogging, going mobile (instead of the brick-and-mortar office, offering 3D Virtual Tours of my listings, Professional photos (oh, the number of people that don’t do that, but really, really should…), and charging for home evaluations to name a few) The more attention I (and my listings) get. Which is kind of the point, no?

 

Why I Only Give Free Home Evaluations to Clients Now

 

I’ve learned my lesson. I will not work for free for strangers for no benefit. I’ll work like a Clydesdale for my clients though, and it’s for them I reserve my resources, energy, and time. To give it away to anyone else is to take it away from them. Priorities, you know?

A few other reasons I don’t offer free evaluations to any Joe Blow are:

  • Clients like it.
    I can’t tell you how often people have called me up asking for a straight-up evaluation.
    “I’m calling you because you’re known to be professional” they’ll say.
    “I want a home evaluation, but plan to sell privately. Can I just pay you for the evaluation and not have to have the conversation about representation?”
    The answer is yes. They respect my time, and I respect their needs. It’s an awesome arrangement. And, often times, that speaks to my professionalism more than offering the service for free.  (Counter-intuitive, I know, but it works)
  • I don’t work for the bank or the mortgage broker.When they send people to take advantage of me, (er, I mean use my services for free), they get paid, their clients get a mortgage, and I get nothing. It puts no food on my table. No, sorry. I do not work for the bank. (Not at those prices!)
  • I’m Not New at This.
    I’ve invested thousands of dollars in my professional training to become the best at what I do. My multiple Specialist certifications came at a price. My edgy technology and professional team members come at a cost. And my years of experience are priceless.
    None of this is offered by a new kid on the block. It’s unreasonable to expect I’d work for newbie wages. (Would you?) And the adage is true – you do get what you pay for. That’s why I pay, and why you should too.
  • To Raise the Perception of our Industry Real estate agents are professionals. We are resented for our seemingly large commissions (here’s a peek at how our commissions work), we’re presumed to be rich, and are expected to work for free as penance. (Just ask the stranger who asked me for thousands of dollars out of the blue) It’s an unfortunate, and unjust perception.By charging for my professional time and service, I hope to communicate the respectability of being a REALTOR®. It is a profession, and one that ought rightly to be paid for.

I have no grand notions of changing the industry single-handedly. Free evaluations have always been done and they’ll continue to be done. And, especially in the beginning when one is eager to connect with people and get their face and name out there, it can still be a viable prospecting method. But I do think there comes a time when a person needs to shed old ideas and embrace new ones.