Should You Rule Out an Agent Over Suggested List Price Differences?

I've encountered some very different scenarios regarding sellers breaking up with a prospective agent(s) over differences in perceived value of the home and the starting list price that would reflect it. While not typical, I've also seen where I and an appraiser disagreed prior to listing a home on value with me being significantly more accurate than the pre-listing appraiser in that scenario.

Examples from My Experience:

My 3rd Agent Opinion for Comparative Market Analysis When Prior 2 Agents Have Major Differences

In one scenario, a seller had 2 agents perform comparative market analysis of a home, and when the 2 were very different, I came in for a 3rd without knowing what the other agents said a home was worth. I don't know if it was the pricing that I suggested, the repairs/cleaning that would influence the price, &/or the marketing that I shared I could offer, but I believe it's likely a combination of each & other factors that won me the listing.

Seller Parting Ways with Me Due to My Opinion of Value Being Lower than Theirs

In another scenario, a seller thought they knew what a home was worth and should be listed for, which was much higher than what I believed it should be listed for. They didn't even have a 2nd opinion from another agent or a local appraiser, but because of the drastic differences in their opinion and my opinion, they stated that we had a different "vision" of the home and should part ways. Sometimes that value that I feel a home should be listed for is higher than what a seller was previously thinking, but because I seek to be honest about price, it's not uncommon for my opinion of value to be less than other agents. Related: Why Buyers & Sellers Often Choose Not to Work with Honest Real Estate Agents & How To Avoid That

A Pre-Listing Appraiser States a Home is Worth More than $85k Below What I Sell it For, But The Seller Still Thought It Was Worth More Than Me

The seller and I had differences of opinion on value on this one as well, with them having a higher number in mind than I did. We listed it for the number they wanted, and it ended up closing for a number closer to my suggested list price than the list price that they wanted that we listed it for. My suggested net list price was within 3% of the eventual sales price, while their desired list price was 10% over the eventual sales price that was determined not by the buyer, who agreed to the list price in the initial contract, but by the another appraiser, who did not agree that the home was worth as much as the contract price.

Because of around 15 months between the time of the appraisal and the time of the sale, and because of rapid appreciation during that time, it accounts for about $50k of that difference, but the remaining >$35k is in part from the cost effective repairs I recommended that likely cost the sellers $5k or less, because the appraiser undervalued the home, & because I marketed the home well.

FAQs on List Price Differences:

Should You Rule Out an Agent Over Suggested List Price Differences?

Typically, no. You can get an opinion of 1 agent, 3 agents, or 5 agents, but ultimately, your top determining factor for an agent shouldn't be their suggested list price. You're hiring a real estate agent, not an appraiser. Appraisers are a lot cheaper with a much more narrow & focused scope than real estate agents. If you cared so much about list price, it wouldn't hurt to hire an appraiser, whose job it is get to pricing right, but 3 appraisers could each have different opinions, and a real estate agent can have a more accurate perception than 3 appraisers in rare cases. I recall a pre-listing appraiser who priced a home 10's of thousands below what I sold it for (listed in another section above).

When hiring a real estate agent, their pricing strategy & the numbers they provide are a factor to consider, & if what they share demonstrates incompetence (not just because it's far off from your perceived value) it might dissuade you from listing with them, but ultimately, the pricing model they provide is low on the spectrum of the top items to look for in a listing agent. In fact, if they say your home is worth less than what you feel it's worth, and if they are candid an open with you about repairs and cleaning when other agents aren't doing that, it's actually a good sign of their honesty and their care about you getting the highest net. Many agents intentionally inflate values and tell sellers what they want to hear because they know that sellers are biased towards those agents that do so.

Related:

1. What to Look for in a Listing Agent for Your Home or Other Real Estate

2. Why Buyers & Sellers Often Choose Not to Work with Honest Real Estate Agents & How To Avoid That

What if I Want to List at a Different Price Than My Agent?

The first thing to do is to ensure that your opinion is somewhat reasonable. Look at articles on how to price a home, find comparable sales, and how to make adjustments to comparable sales in pricing. If you know someone that knows real estate well (especially an appraiser), and someone who is honest with you rather than affirming to you who could be dishonest for the sake of keeping the relationship intact, share with them what your prospective agent is saying and what you are thinking.

Agents' policies vary substantially in this scenario. Some agents won't list for more than their opinion of value without evidence that can move their opinion. Those that are willing to list for above their suggested list price typically won't have as close of a price to sales price ratio vs other agents who have a stricter policy & won't be willing to list if not at their suggested price.

I've been provided comparable sales from a seller who had an inflated opinion vs me before, but in that situation, every "comparable" sale they provided was more distant than the most distant comparable sale I pulled, with proximity to the home being a significant factor involved.

Sometimes agents will agree to list with you for your desired price if you agree in advance to a price reduction strategy if it doesn't sell at your initial list price. Depending on local market conditions including median/average market time, price reductions every 2 weeks to 4 weeks of 3% are perfectly reasonable requests if your agent would like to see that agreed to in advance. If the listing agents' suggested list price wouldn't happen for a long time with those price reductions, you might also get a request to list for longer than you had initially planned.

If the time of year that the property would be the listing agent's suggested list price is very different than when they make that suggestion, that can also throw things off due to changing market conditions and amenities that may no longer be available or may no longer look the same.

Related:

The Impact of Season on Real Estate Photography

Seasonal Market Trends

What Are the Top Things to Look for in an Agent?

For my in depth article on this question, go here.

Items to look for before agreeing to interview a prospective agent for a listing appointment:

1. How Experienced Are They (Career Total Volume)? 2. How Are Their Reviews? 3. What Are They Communicating? 4. What Have They Published?

Items to look for before & in your prospective agent's listing appointment:

1. Detailed Walk Through of Your Home 2. Are They Candid & Honest, or are They Saying Nothing Wrong About the House & Trying to Win You by Befriending You? 3. Comparable Sales 4. Industry Knowledge 5. Marketing 6. What Multiple Listing Service will you put me in? 7. Staging & Extras 8. Enhancing Buyer's Experience In Property 9. What Gadgets/Physical Tools Does Your Agent Have Available? 10. What Digital Tools Does Your Agent Have Available? 11. How do you Handle Showing Requests? 12. Do You Ever Engage in Dual Agency, & If so, Under What Circumstances & What Percentage of Sales? 13. "What are the selling features of my property?" 14. How do You Handle Multiple Offer Situations? 15. What do You Charge? 16. Can I Cancel the Listing Agreement in the Future Prior to Expiration? 17. Will You Offer What Another Agent is Offering?

Items to look for in your agent's previous listings:

1. Highly Enhanced Searchability & Details (standard with Adam) 2. Aerials (standard with Adam) 3. Virtual Tours (standard with Adam) 4. Professional Photography (standard with Adam) 5. Area Photos (typical with Adam) 6. What Multiple Listing Service (MLS) are used (up to 4 with Adam)?