What You Need to Know About Agents Who Claim to Have a Buyer for Your Home

Real_Estate_Today_bylineWhen I was a new agent at Coldwell Banker, my trainer shared the expression “listors last.” In other words, our goal should be to succeed as a listing agent, even if we get our first paychecks by representing buyers. But how does one get listings? You can solicit your “sphere of influence” (i.e., friends and family), but that can take you only so far. You can hold open the listings of busier, established agents who either can’t or don’t want to hold their own listings open, hoping that an unrepresented buyer comes along who also needs to sell their home but hasn’t yet hired a listing agent.

Some agents specialize in cold-calling expired listings or For-Sale-By-Owner listings. If you have your home on the MLS and the listing expires, be prepared to be deluged with letters, phone calls, emails and door knocks from agents claiming they can succeed where your previous agent failed.

I got my start by “farming” a subdivision in Golden. The practice is called “farming” because you are “planting seeds” and looking to “harvest” listings as the homeowners come to know and appreciate your newsletters, calendars, garage sales and other special events or services for that subdivision.

Nowadays, I get most of my listings from people who have been reading this column for a decade or more and feel confident calling me when real estate needs arise, sensing that I understand the real estate market better than their friend or relative who got their real estate license, and better than the agent who sold them their home (if they even remember who he was).

Then there’s the approach taken by an agent I’ll call John (not his real name).  His approach is to hire Door Hangers Direct to print flyers that look hand-written saying, “Call me. I may have a buyer for your house.”

Notes from John with that message were taped to the front doors of two Golden Real Estate listings — one a year ago and another one last week. Since the notes looked hand written, my initial thought was that another Realtor had violated our Code of Ethics as well as Colorado law by soliciting one of our sellers. However, because distribution by a third party is considered “mass advertising” (even though it looks individually written), that rule does not apply, so long as the message contains a disclaimer (usually in small print) saying that it is not a solicitation if your home is currently subject to a valid listing agreement.

To see how successful this approach might be, I tracked down 10 sellers who had listed their homes with John earlier this year.  Most of them told me they had listed with him because of the note found on their front door. Seven of the 10 recommended him.  Two were annoyed that John did not in fact have a buyer for their home. Indeed, of the 24 listings sold by John in the past 6 months, neither John nor anyone else in his brokerage brought the buyer.  Industry wide, about 5% of listings are sold by the listing agent.  I had to go back to March 2017 to find one of John’s listings that he sold himself.

From my interviews I learned that John offers to cut his listing commission in half if he sells the home himself, but that’s an empty offer, given that, as one disappointed seller told me, “John only lists homes, he doesn’t sell them.” John confirmed this himself, telling me an interview that he refers buyers to agents from another brokerage, instead of handling them in-house. And he doesn’t hold open houses where he might encounter unrepresented buyers. (He was surprised that I do.)

Claiming to have a buyer has long been a technique for obtaining listings, and smart agents like John cover themselves in their notes by saying they “may” have a buyer, not that they actually have one.

How Top Producing Agents Work

Getting to know “John,” I’m reminded of the business model of famed real estate coach Tom Ferry.  John is one of Tom’s students and practices what Tom preached.

My first year in real estate, 2002, I attended one of Tom Ferry’s “Super Star Summits” in Palm Springs. Tom espoused several practices, including the following:

Delegate everything you can.  Hire vendors to print and distribute flyers and newsletters, to install and remove yard signs, to take photos and create virtual tour, to enter listings on the MLS, and to manage transactions through to closing. Don’t waste your time with open houses, and refer out (for a 25% referral fee) all buyer leads, including your sign calls.  Instead of answering your phone, change your voicemail greeting every day saying you’re with clients most of the day and will return calls between certain hours.  In other words, it’s okay to lie. 

Tom Ferry’s system works, but it’s not for me.

 

 

Author: Golden Real Estate, Inc.

Golden Real Estate is a prominent member of the Denver/Jefferson County real estate scene. Based in Golden, we service both Denver and Jeffco, representing both buyers and sellers. We're well known for Broker Jim Smith's weekly "Real Estate Today" column published in the Denver and Jeffco editions of the Denver Post's YourHub section each Thursday. The column also appears in several weekly newspapers and is archived at www.JimSmithColumns.com. We have nine agents, all of whom are Realtors and EcoBrokers. Our office is solar powered and several of us drive electrics cars. Known for our sustainable practices, we accept polystyrene (aka "Styrofoam") for recycling, keeping 200 cubic yards per year out of area landfills.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s