Selling with Ambiance

Integrity and Experience


When a real estate agent says they have consistently sold "over asking", that should be a red flag.

It is very true that an agent can help you improve the marketability of your home, business, or commercial space. A great agent can also bring to bear, his or her experience, knowledge of the local market and macroeconomic trends, network of contractors, stagers, and even other companies' agents. Indeed, market data shows that homes sold with real estate agents versus "sold by owner" are sold at higher prices net of that agent's commission. (As an aside, the risks of selling a home on your own versus using an experienced, trained, and licensed real estate agent are presented in our real estate education YouTube video channel.)

BUT ... the problem with real estate agents claiming to consistently sell "over asking" is that they might be (emphasis on "might be") accomplishing that by listing your property well below normal parameters. They do this for three reasons:

1) They wanted to make a quick sale and a quick commission at the detriment of their client (the home seller) because for every $100,000 in sales price difference, the difference in commission may be as little as $1000 to the agent after fees, taxes, and shared commissions are figured in. To rephrase, there is a moral hazard for agents to suggest lower listing prices to sell properties quicker. (See reference below to Freakanomics by Steven Levitt of MIT)

2) They don't know the market or do not have adequate expertise to suggest your home's asking price.

3) They want to make the Seller believe they are adding value to the transaction, when really they just priced it low.

We at Ambiance do not tout that we sell "over asking" as a accolade. Instead, we believe that our clients should and do sell at fair market value for what the property is worth. Simple economic theory suggests that with perfect information, supply and demand will dictate the price at which a home sells. Ambiance agents therefore will help our Sellers through consultation and true value add work: helping you to decide whether to remodel that bathroom with data-supported analysis, introducing you to our network of stagers and contractors to perform necessary preparation of your home for sale, and bringing our decades of combined experience and relationships with other brokers/agents who represent the person or persons who will eventually buy your home. Simply, Ambiance helps you improve the value of your home with preparation, and helps get the word out so that you can get that fair market price.

Contact us for more information on why Ambiance is different.

GOOD READ: Freakonomics by MIT Professor Steven Levitt

Discusses the moral hazards facing real estate agents and their clients, due to economic incentives/disincentives and incomplete information dissemination /transparency. Resulting behaviour includes the fact that agents will market their homes for longer periods than they will market their clients homes. (Don't let an agent convince you that a 1 week listing period is in your best interest!) The disincentive for agents to encourage their Seller clients to list properties under estimated market value is also discussed. Ancillary to that listing price behaviour is the "sold over asking" boasting phenomenon practiced by some agents.