“Hot Market” Under-Pricing Sales Technique – Real Estate Agent Commission Issues

By Susan Saurastri | Published: September 2, 2011

During a “hot market” there is a certain marketing technique which, though very effective, could cause trouble because of the way the contract is written. This is the practice of “under-pricing” the home. In a hot market, a home that is under-priced gets a lot of attention from other Real Estate Professionals, and they all start showing your home to their clients. Often, you get into a situation where multiple offers are presented and the price starts going up because of the frenzy. You end up selling the house above your asking price and perhaps above what you could have received if you had priced it traditionally.

However, the technique does have the potential to backfire, so you should build safeguards to prevent having to pay a commission “just in case.”

You see, the listing contract usually states that if an offer is received that meets the terms presented in the contract (including price), the real estate agent has earned his or her commission – even if you decide not to sell. A reputable agent would never attempt to collect a commission if they were using the “under-pricing” technique and it backfired, even if they are technically entitled to one. For that reason, in the “additional terms” space on the listing contract, you should specify your true target price – when the agent has really earned the commission.

More home seller tips and advice

This entry was posted in Sellers. Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

  • CONTACT

    SUSAN SAURASTRI

    SEARCH BY MAP

    HOMES FOR SALE

    PUT YOUR HOUSE

    ON THE MARKET

    WHAT IS

    MY HOME WORTH?

  • Proudly Serving These Communities

  • MortgageLoan

    $

    %

    years

    %

    $ per year

    $ per year

    %

    © Mortgage Calculator

  • Member’s Area

    Login

  • Affiliated With