“A brand new Aston Martin for a week’s worth of work. It doesn’t suck to be me!”– Chad Carroll, Million Dollar Listing Miami
Ego. Greed. Rude. Disrespectful. Materialistic.
I don’t know why I watch this show, sure, I guess it’s entertaining, but it drives me insane to see my profession displayed in this light. And, unlike Dirty Jobs with Mike Rowe, which celebrated some of the hardest working men and women in America for doing the jobs most would never do, Million Dollar Listing paints the profession of real estate agent as a “lifestyle,” and celebrates the “stupidity” and “character flaws” of those in the profession.
On a recent episode of Million Dollar Listing Miami, one of the stars of the show, in the process of bitching about her client, revealed just how little show knows about getting her clients the best result. “We all know the biggest issue, when a home doesn’t sell, is price!”
First off, NO, we don’t all know that!
In most cases, to blame the seller for unrealistic expectations, in the form of “price,” is only because the agent doesn’t know of any other way to sell a home. It is stupid and foolish to focus on price, because price is just a number, beyond that, it doesn’t have any meaning. Most agents, including those on Million Dollar Listing—supposedly the best of the best—typically determine the price of a home by looking at the price of other comparable properties. Meaning, if there are four other “comparable” homes in your neighborhood, they add up the price for each, find the total, then divide by 4 to find the average. This is what’s known as a price-driven approach, and heed my warning: It’s a terrible way to sell real estate. Because price doesn’t determine price, value determines price.
And the sales price displayed in the MLS or on county records can’t tell you anything about the value of a home, in relation to price.
If a home sold for $250K right next to your home, is it really a comparable? Maybe. But if it reeks of cat urine, I would argue it is not. Or what if the homeowner was a heavy cigarette smoker, and always smoked inside. Again, is that property a true comparable? No! – definitely not. The smell of cigarette smoke or cat urine, in my experience, knocks at least $20,000 right off the top of the purchase price.
So to include this home in a list of comparable homes to yours is either, and you can be the judge, incompetence or negligence.
In my book ‘The Warren Buffett Approach To Sell Real Estate: How to protect yourself from Real Estate Greed & bank and extra $30,000 profit by taking a Value-Driven Approach’—on pages X to X, Chapter 5, I outline the advantages of taking a value-driven approach oppose to the inferior but more common price-driven approach. Why most agents choose the latter, when it’s rarely in the best interest of their client, stymies me. I don’t get it. Equally perplexing, though, is why do their clients tolerate it and let them get away with it?
Perhaps they don’t know any better, but certainly the agent must, and where is that agent’s professional standards, where is their integrity?
The crux of it is this; if you understand how value works, and what creates value, you can manipulate it in a positive manner, to dramatically alter the sales price of a property. This plays on the fact; the human mind is not a rational creature. It is irrational. It desires things based on predictable emotions, for example, exclusivity, whether or not something is rare, creates value. As George H. Ross puts it, Donald Trump’s chief negotiator, “It’s easy to sell the penthouse, there’s only one of them.”
And this is just one trigger known to create value, or should I say, perceived value, in the mind of property buyers. There are others too.
But if one doesn’t do a comprehensive diagnosis, to know which of those triggers is present in a property, or which can be created, if absent, then whoever your agent is, is setting your profit aflame.
In the medical community there is a saying, “Prescription before diagnosis, is malpractice.”
There is another thing that upsets me about this show, Million Dollar Listing, and sadly, it doesn’t just happen on the show, it’s pandemic throughout the industry. I call it “smoke-and mirrors” negotiating. A lot of agents are professional actors, when it comes time to play “hard-ball.” They say they’re willing to fight for your extra profit, and they tell you they are, but really, they have just “come to an agreement” with the other agent, to put the deal together. Where, each agent, to fulfill their agreement to each other, becomes an adversary to their client—to either talk them up, if their a buyer, or to talk them down, if they’re a seller.
This is something you see repeatedly on Million Dollar Listing, but it happens everywhere else too. And if other agents choose to hate me, because I won’t play their little game, so be it. I don’t see it as my obligation to make the other side smile. I have a job to do, and I’m paid good-money by my clients to get to the lowest or highest price possible, depending on whether they’re buying or selling.
It’s not my job to sell a home as “quick as possible”, to make a few thousand bucks in a weekend.
And no, I don’t begrudge Chad Carroll for selling a $5 million dollar property in a week, making him enough to purchase a brand new Aston Martin. I begrudge him, because likely he could have gotten his seller more, had he not been so focused on creating his own bottle of wine for the open-house, a total ego play, called “Chad-Teau.” Or been so focused on “Getting in, getting out, and getting paid,” as fast as possible, regardless of outcome.
I begrudge him, because given the platform to elevate the profession of real estate agent—one I take serious and am passionate about—his business practices only further deteriorate it.
Oh well, I guess.
As long as my clients (and readers of my book) learn to understand the difference between a superior and inferior approach, so they may profit, that is all that truly matters.
I’m thankful to have clients like Josh and Katie, who recently sold their home in Ijamsville, and had this to say, “We felt like we were Eric’s only client! He was always available to us and always willing to make time for us. It genuinely seemed like nothing was more important to him than helping us sell our home at a price we were happy with. He consistently demonstrated expertise in all areas (listing, pricing, staging, sales-strategy, the market overall, negotiations, inspections and home-repair professionals, and closing) – we trusted him completely to guide us through the sale of our home. Based on our experience with Eric, we will most definitely recommend him to family and friends.”
The truth is, the real profit is made in the preparation phase of your home sale, before it ever hits the market.
Properly presenting your home as an Asset that a buyer would be willing to pay top dollar for is not easy. I’ve had some sellers spend up to 6 months getting their house up to my standards, with my guidance, in accord to my checklists, because I knew that is what would be necessary, to hit the sales price that the client had stated.
I don’t hide the fact that taking a Value-Driven Approach is more work.
But the rewards are often greater too. Bob and Jennifer Stevens, recent clients of mine, are proof of this fact. In just 2 weeks on the market, after 2 months of intense preparation, we had 4 offers, and the offer we ended up accepting was $41,000 over asking. Needless to say, these were very happy sellers. And they deserved it, as they worked hard in the preparation phase.
Remember, “A prescription without a diagnosis, is malpractice.” Any agent that shows up with a listing presentation, and begins to sell you on his “expertise,” is committing real estate malpractice. It’s just a fact. Real expertise is demonstrated, not sold.
For a more in-depth discussion on this topic, go to: www.EugeneFreeBook4Charity.com. There you can request a FREE copy of my forthcomiTo Sell Real Estate: How to protect yourself from Real Estate Greed & bank an extra $30K in profit by taking a Value-Driven Approach.
ABOUT THE AUTHOR: Robert Grand