As an example, let me tell you about an experience I had over the weekend. I knew a seller who had listed his home for $532,000 for one month and had only ONE showing (no interest! The price was obviously listed too high!) I looked it up and got a true valuation of the home- it was only worth $430,000. To get the listing, however, the agent had agreed to whatever price the homeowner wanted, rather than taking the time to review correct pricing with their client.
Now, why would an agent agree to an incorrect price just to get a listing? Typically two types of Realtors do this. Either those who don’t sell enough homes to price it correctly (you want someone who lists at LEAST 6 homes each year for sale) or else those that simply want to sign with you so that they can have their physical sign in your yard (as this generates extra business for them through sign calls). These Realtors gradually, over time, have you reduce the price until it’s at the correct pricing, but statistically, these agents end up selling your house for UNDER market value even though they start out with a price that’s too high!
So, try to guard yourself- ask your Realtor before you sign with them how many homes they have listed as a seller’s agent in the past 365 days! It never hurts to do your homework!