Do You Have a Snake Oil Salesman in Your Kitchen?

What if I told you that you could make $100,000 more than your next door neighbor did on the sale of their home. Would you listen?  I’ll show you comparable listings and maybe some sales from the “area” to justify the price plus we’ll add in all the upgrades you’ve made over the years. We’ll test the market and see if we can’t find a rich Canadian to buy your home…you know how those Canadians like our Arizona weather.

If I told you all this, what would you do? Hopefully, you’d run away.

Just as in other industries, real estate sales has its share of sales people who’ll tell you just about anything you want to hear in order to get their sign in your yard. I call these people snake oil salesman. How can you recognize a snake oil salesman in your kitchen?

1. They suggest a list price well above what surrounding homes sales prices
2. They agree that your home is the best in the neighborhood
3. They calculate list price based upon price per square foot
4. Once they calculate the list price based upon price per square foot, they then add on top for the “upgrades” of  a home
5. The price of your home is wholly based upon active listings–what other homeowners are asking for their homes
6. They use phrases like “Test the market,” “We’ll hope for a cash buyer,” “Rich Canadian,” “Rich Californian,” or “Waive the appraisal” in conversation
7. Comparable sales used are from several miles away while the neighbor’s home sold last month and didn’t make the list
8. Like the snake oil salesmen of yesteryear, they tend not to work in any one particular geographic area, but move along ahead of their reputation

These slick-lipped sales people simply tell the seller what they want to hear while not providing a true fiduciary duty to them. Without a doubt, a real estate professional should try to maximize the equity in a property, but it must be within the boundaries of the current market.

The costs to a seller by a snake oil salesman can be significant.

• Extended time on market resulting in potentially depreciating values, additional unnecessary payments, and continued maintenance and upkeep expenses.
• Lost opportunities within the current market, including inventory shrinkage, potentially increasing interest rates, and decrease of present equity.
• Placing the home under contract only to have the appraisal not agree, resulting in cancelation

Of course, these costs don’t include the frustration of months on the market and having to keep the home in “showing shape” while strangers continue to parade through the home.

A real professional will review all the comparable home sales from your immediate neighborhood and surrounding neighborhoods. They will discuss with you any variances within the market that resulted in abnormally high or low sales prices. They will set reasonable expectations with you both for pricing, marketing, and communication.

If someone is telling you something too good to be true, it probably is. Be careful with them. You might just get bitten.