A professional, trustworthy listing agent can be a huge asset for you when you’re putting your house on the market. They can attract more buyers through marketing, show the house for you, screen buyers for credit worthiness and help you when it comes to negotiating an offer. Ultimately, sellers who use listing agents to sell their homes see final sales prices that are up to 11 percent higher than those who go the “for sale by owner” route [source: Riddle].
Legally, your listing agent is obligated to represent only your interests in all negotiations, once you sign an agreement with him. This obligation is called “fiduciary duty,” and should keep your agent from interacting with buyers in a way that compromises your final sale price. Still, there is some personal and financial information that you should keep from your agent, to avoid the risk of buyers or other agents catching wind of it. In some cases, there are pieces of advice that might seem harmless, but could end up hurting you when it comes to selling your house. Read on to find out when you should keep your mouth shut when working with your listing agent.
you won’t settle for a lower price
Listing agents set out to sell your home at fair market value. It might seem logical to set a listing price for your home based on a tax or refinancing valuation, or to set a price that earns you a certain amount of money after closing costs. However, especially in a buyer’s market, it isn’t always realistic to expect your ideal price. Telling a listing agent you will only sell for your dream price can have several negative results. The agent might decline to take your business if they feel that you’re too unrealistic about the market. If an agent does accept your listing price, they are only wasting your time. Houses priced above the market tend to stay listed for much longer, and the longer a house is on the market, the lower the sales price tends to be. Even if an agent tries to do his or her best by you and stick with your listing price, buyers will only be scared away. It’s better to take your agent’s advice about what the market will bear.
only bring me serious offers
A listing agent following their legal and ethical duty will keep you informed of all offers that you receive. However, if you tell the listing agent that you don’t want to hear offers below a certain price, he or she could tell a buyer that you’re not interested. It’s good practice to make sure the listing agent knows that you want to hear any offer that they receive, no matter how small. You should even insist on hearing all offers in the language of your listing agreement. Unscrupulous agents who want to get a higher commission might not tell you about a low offer and instead hold out for a better one. Even a trustworthy agent might think they are acting in your best interest, and not bother to bring you low bid [source: Smart Money]. Especially in a buyer’s market, offers that seem low at first can become acceptable through negotiations and counter offers. Even if you end up rejecting those low offers, you should hear about them so that you can make educated decisions about whether you need to lower your asking price.
don’t show my home unless i’m available
The idea of strangers opening your underwear drawers or dragging their muddy feet across your white carpet might be too stressful to think about. The urge to be present at every open house and every showing is a natural one. But try to control it. Buyers can be uncomfortable with the seller standing next to them while they look at a home. They may be too shy to ask the questions they really have with you standing there. So, rather than forbidding your listing agent from showing the home without you, it’s better to get lost whenever prospective buyers are interested in seeing it. This can prevent hurt feelings on your part and discomfort on the part of browsers. Be ready to run an errand or go out to eat at the drop of a hat if an agent calls with a perspective showing.
you have all the time in the world to sell
It’s a fact of the real estate market that the longer a home is on the market, the lower the final sales price for that home will eventually be. The reason is simple supply and demand. If demand for your home is high, it will attract a large number of buyers quickly. Those buyers will have to outbid each other to win the right to buy your home, driving the price up. If demand is low, it will take more work to attract buyers, and you’ll often have to settle for your initial price, or lower the price to attract buyers. If you tell your listing agent that you have plenty of time to sell your home, they may take that as permission to put their efforts on the back burner and concentrate on their other listings. Without their marketing muscle working for you, you’re far less likely to make that quicker, higher sale. In fact, your initial listing agreement with an agent should only last a maximum of three months. If you haven’t made a sale after that period, you can either renew the agreement, or find another agent.
you are selling the home because of a divorce
It’s the kind of thing that would be easy to drop into casual conversation with a listing agent: “Oh, my husband and I are getting divorced, so we have to sell the house.” It might seem completely harmless, but when buyers perceive a homeowner as desperate to sell, they often try to take advantage by making offers well below the listing price. The hope is that you’ll accept because you need to get out of the house as soon as possible. A listing agent might innocently bring up the topic at an open house, during a showing or even as inter-office gossip with other agents. It may seem harmless to the agent also, but when word gets out among potential buyers, it could seriously decrease the final price of your home.
you have to sell because of financial problems
It’s never a good idea to let word reach buyers and other agents that you are desperate to sell a house. Typically, you’ll receive lower offers and a lower final sales price if buyers think they can take advantage of you. So, it’s better not to tell the listing agent if you are selling because you lost your job, or have some other financial hardship. Some agents might be tempted to advertise your home as offered by a “motivated seller,” a signal that the seller will accept a below-market offer [source: Evans]. You’ll likely have better results if you keep financial problems to yourself, so buyers don’t try to take advantage of your situation. Sharing financial distress before signing a listing agreement could also scare away a skilled agent who could secure a good closing price. They may worry that you could be tempted to bail on them to save money on a commission.
you are moving because of a serious illness
Like other catastrophes that require homeowners to move out as quickly as possible, it’s in the seller’s best interests to keep news of a serious illness from buyers. Even if a listing agent is sensitive to your situation, they might show too much urgency to sell in listings, ads, and during showings and open houses. It’s best to approach the listing as you usually would, to ensure that you can get the best price. When it comes to signing a listing agreement, don’t insist on a shorter contract term, despite your urgent situation. While you might like to allow the agent only one month to sell your home before terminating the agreement, most agents don’t think that gives them long enough to realistically make a sale.
a death occurred on the property
Many states require that homeowners disclose all material information about a house to a buyer prior to closing. Material information includes damage to the house and past repairs that will influence the final sales price. Since you have a legal obligation to eventually tell the buyer about those disclosures, there’s no point in keeping it from your listing agent. However, information like a death that occurred on your property is a different story.
Legally, your options may be limited in whether or not you must disclose a death to the buyer, and by extension, the listing agent. Some states require that deaths be disclosed just like property damage under certain conditions. For example, in Texas, you only have to disclose a death if it happens because of safety conditions with the house. In California, a death should be disclosed if it happens within three years. Some states require that gruesome deaths that made headlines be disclosed, and some states prohibit AIDS-related deaths from being disclosed, as part of anti-discrimination laws. If you’re not legally obligated to disclose a death, keeping the information to yourself can help keep the listing agent from slipping up and telling buyers. However, you should also check with an attorney to make sure it won’t create any liability in your particular state.
you’re interested in a certain type of buyer
Federal equal housing laws were passed in 1968, in the wake of the Civil Rights Movement. Laws such as the Civil Rights Act of 1968 and the Federal Fair Housing Act of 1968 prohibit renters and home sellers from discriminating against individuals because of race, sex, religion and other factors. While it might seem unnecessary in this day and age to caution against discriminating against prospective buyers, it’s easier for you and your listing agent to run afoul of these laws than you would think. For example, it’s not a good idea to tell your agent that you would like to have only a churchgoing family, or a family with children, move into the house [source: Carr]. Religion and family makeup (whether a buyer has children) are two of the protected classes under federal law. If your agent tries to dissuade people from making an offer on those grounds according to your instructions, you could find yourself involved in a discrimination lawsuit. Other federally protected statuses include national origin and handicap. Some states have even more strict discrimination laws that may cover political party affiliation, sexual orientation, or groups of people that you might think your agent could weed out in a standard background check, like convicted felons and people receiving public assistance.
anything — before you’ve signed a contract
Before you sign a contract with a listing agent, keep all of your personal details and information private.
In your initial search for a listing agent, you will have conversations with a wide variety of agents before you settle on the one that is best for you and your property. You’ll chat about the market at local open houses, ask prospective agents to see comparative market analyses for your home, and maybe even chat with friends or relatives who have their real estate licenses. During this process, you need to be extremely careful about making any kind of oral commitment without signing a formal listing agreement. That written agreement protects your rights and the agent’s. It ensures that they won’t represent anyone but you in the transaction, and it obligates you to pay them a commission after they close the deal. Without that agreement, sharing too much information about yourself, your home and your financial situation with a prospective agent is a bad idea. If you ultimately don’t sign an agreement with that agent, they could circulate information among other agents and prospective buyers, which could compromise your agent’s ability to negotiate the best deal.
Taken from Matt Sailor of HowToDoThat.com