New and old agents alike dream of listings. After all, you’ve probably heard the old saying, “If you don’t list, you don’t last.” It’s true that listings are the bee’s knees. A single agent working alone can handle many more listings than he or she can buyers. That’s because many aspects of the listing can be handled from a desk — taking phone calls, preparing advertising materials, posting to the Internet. But the buyers need to actually go out and see the homes, and this takes time (which is why top-producing agents focus on obtaining listings).
The truth about listings is that you’ve got to be able to determine whether the listing will actually result in a closing. Therein lies the rub. There are certain types of listings that agents should never take. Watch out for these; if you take these listings, you may not last.
1. There are too many existing liens on the property.
You’ve taken a listing for a lovely property. It shows well. The sellers are divine. The property is priced right. The only problem is the title report. After viewing a copy of the title report, you see that there are two mortgages and several other liens (abstracts of judgment, tax liens, city and county code citations, and an HOA lien to boot). Once the value of all this debt it totaled, it equals well more than the sales price. If the seller is not willing to pay the difference, this may be a hard deal to close. While short sales are fairly common these days, negotiating eight liens may not result in a quick and efficient closing. Your time may be better spent looking for new leads.
2. The seller wants more than the property is worth.
You’ve done your homework. The property is valued no higher than $367,000. However, the seller insists on $450,000. Unless you can convince the seller to obtain an appraisal so that he or she can be further educated on the market value of the home, this may be a listing to avoid.
There will always be an agent who will take an overpriced listing. However, what generally happens is that the seller becomes angry because the agent couldn’t sell the property at the seller’s price. Ultimately, the seller fires the agent, cancels the listing, and hires a second agent to list the property at a lower price. Be that second agent. Instead of taking overpriced listings, work on soliciting expireds who are ready to work with a second agent at a lower price.
3. You’re asked to compromise your ethics.
Real estate agents have a fiduciary obligation to their clients, and a duty to be honest and trustworthy in all of their dealings with others. If you are aware of some issue relating to the property (such as a sewage or plumbing concern, or even a rat infestation) that is not being disclosed, it’s your responsibility to disclose it. Never work with anyone who is going to put your license on the line. If you plan to have a long career in the field of real estate, you’ll probably need that license.
When the phone rings and it’s a seller ready for you to come list a home, that’s a very exciting prospect. But before the contract is signed, sealed and delivered, consider whether this is a valuable listing or whether it will be your last.