Real estate agents, emotional intelligence, and sale price

Can real estate agents with high emotional intelligence get you a higher sale price?

When it comes to selling a home, the prescribed course of action is to set the right listing price and prepare the home to be shown. Real estate gurus proclaim these as the two most important items to making the most money from your home sale. And although these are widely accepted goals to getting your home on the market, recent research may actually counter the conventional wisdom about pricing and staging; while a new line of thinking suggests that you’re choosing the wrong agent too.

Staging, as we know it, has been a staple of home sales for almost forty years. And listing agents almost always discuss it during their listing presentation. Research has already proclaimed that furnished homes sell in less time than vacant homes (see Chien-Chih Peng’s study published in the June 22nd 2004 issue of The Appraisal Journal), but does staging add perceived value to the price? Well, Lane, Seiler, and Seiler (2015. The impact of staging conditions on residential real estate demand. Journal of Housing Research, 24(1), 21-35) conducted the first study to determine the virtues of home staging. Their results suggested that home staging does have some impact on the home buying process, as you might expect; “…we find a neutral wall color and good furnishings do significantly influence a buyer’s perceived livability and overall opinion of the home.” However, the study’s main conclusion was that staging a home does not significantly impact sale price.

If you think that pricing a home is a straight forward process of gathering and extrapolating the latest neighborhood data to your home, think again. There may be more going on in your head than you realize. A recent study by Loveland, Mandel, and Dholakia (2014. Understanding homeowners’ pricing decisions: An investigation of the roles of ownership duration and financial and emotional reference points. Customer Needs and Solutions, 1(3), 225-240) suggested that home sellers make different home pricing decisions based on the length of ownership, anticipation of financial gain, and emotional experiences in the home. It seems that the longer you have owned your home combined with a greater financial gain or positively associated memories, may incline you to over-price your listing and likely maintain a higher price; while those who have a shorter time of ownership combined with less financial gain or bad memories price more reasonably, and are more likely to make larger price adjustments.

So maybe getting the most money for your home comes down to your agent. After all, research confirms that experienced real estate agents sell homes faster and for more money than rookie agents. And yet, subjective conceptions of agent traits may guide you to choose your agent, regardless if your assumptions are valid or erroneous.

Forget savvy, forget aggressiveness, forget connectedness, or any preconceived notion about what personality traits your agent needs. A recent pilot study of licensed real estate agents by Swanson and Zobisch (2014. Emotional intelligence understanding among real estate professionals. Global Journal of Business Research, 8(5), 9-16.) suggested that the key underlying trait for real estate success and financial gain is emotional intelligence (EI). The concept of EI is complex, and is often confused with typical personality traits such as sanguinity or purpose. Rather, EI is the ability to be aware of, and command emotions in oneself and others. Those with EI are thought to be empathetic and able to acknowledge responsibility for actions and emotions. Additionally, those with high EI are likely to better understand and manage others’ motivations – which is fundamental to negotiation.

Google+
Copyright © Dan Krell

If you like this post, do not copy; you can:
reference the article,
like it at facebook
or re-tweet.

Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

July 23, 2015May 21, 2019

Bait and switch tactics by real estate agents

The Federal Trade Commission (FTC.gov) states in its Advertising FAQ’s: A Guide for Small Business, “It’s illegal to advertise a product when the company has no intention of selling that item, but instead plans to sell a consumer something else, usually at a higher price…”, when describing “bait and switch” advertising.

The term “bait and switch” is sometimes bandied about by disgruntled consumers, when referring to their encounters with real estate agents. Although the scenarios depicted by the annoyed consumers require legal scrutiny to determine if the situations meet the definition of bait and switch as described by the FTC, it makes you wonder about what some agents are doing and/or saying to get business.

Bait and switch complaints are often about homes that are advertised for rent or sale, but are found to be off market after calling agent. These listings are often the result of listing syndication gone awry; or worse, “scraped” listing information (Internet scraping is when website data is taken and collected, often without authorization) reposted by an unauthorized website to attract traffic away from the website of origin.

Scraped listing information can float around cyberspace for months or years after a home has sold. Although there has always been an element of out of date listing information found on the internet; sham listings and unauthorized postings of listings used to lure consumers, are frequently cited by both consumers and agents because the information is often misleading or incorrect. And although some responsibility may be placed on the workings of the internet; some real estate agents may be to blame for using questionable advertising practices to get their phone ringing to attract home buyers. Such practices include: advertising other agents’ listings as their own, or advertising homes that are off the market.

The MLS syndicates and distributes home listing information across the internet to authorized websites, and updates the listings to maintain accuracy and integrity of the MLS. Although the internet seemed to coalesce for a brief time to present reliable home listings and other real estate information, while deterring scammers and rogue websites; the recent surge in home sales and other economics may be responsible for a return to a “wild west” atmosphere in cyberspace. This year’s reshuffling of MLS data access to major real estate portals, forcing some sites to find missing information elsewhere, is likely to have added some confusion.

Home buyers aren’t the only ones complaining; as some home sellers have similar complaints, saying they’ve been misled. Sometimes the complaint is that their agent “promised” a high sale price, only to be coerced to reduce the price at a later time; or the agent over-promised services that were never delivered.

It must be said that many buyer and seller complaints stem from their dissatisfaction, rather than an actual breach of ethics; and yet many legitimate ethical breaches go unreported. Regardless, it is unfortunate that some real estate agents resort to questionable sales tactics to attract buyers and sellers; and either learn the tactics from real estate trainers, and/or develop them on their own and share with other agents. Even though a Realtors® Code of Ethics exists to guide professional behavior and business practices, some have a “catch me if you can” attitude.

Due diligence, on your part, can make your home buying or selling experience increasingly trouble free and more enjoyable.

Original published at https://dankrell.com/blog/2015/07/23/bait-and-switch-tactics-by-real-estate-agents/

By Dan Krell

If you like this post, do not copy; you can:
reference the article,
like it at facebook
or re-tweet.

July 17, 2015November 23, 2021

Real estate horror stories question the limits of seller disclosure

Property disclosure laws are mostly straightforward about making known the physical condition of a home that’s for sale. However, whether or not to disclose other material facts, that may include events that occurred in and around the home, is not always clear. Material facts about a home are often described as information that may sway a home buyer’s decision about the purchase or purchase price. Some of the more familiar material fact cases that are typically reported in the news include haunted homes and unruly neighbors. Yet, these two recent accounts have again raised the question and debate about what the seller and the real estate agent is obligated to disclose.

Sounding like a plot of a horror movie, it is the real estate horror story of a New Jersey family. Philadelphia’s WPVI-TV (New Jersey family says they are being stalked at new home; 6abc.com; June 22, 2015) reported on a family that was allegedly stalked through creepy and threatening letters. The new home owners started receiving these letters several days after closing on their million dollar home.

The letters were described as written by the “Watcher,” who claimed to be the latest of his family to watch the home with such statements as the home has been “the subject of my family for decades…” Other letter statements include “Why are you here? I will find out…” And, “I am pleased to know your names now and the name of the young blood you have brought to me.”

According to Tom Haydon, who reported on the lawsuit for NJ Advance Media (Lawsuit: ‘Bring me young blood,’ stalker told Westfield home buyers;nj.com; June 19, 2015), the new owners were so disturbed by the letters that they never moved into their new home; and have been trying to sell it. The family is suing the seller alleging that the seller knew about the “Watcher” because the seller did not disclose that they allegedly received a similar letter prior to closing.

You’ve heard about “Snakes in a Plane?” This next story is about an Annapolis MD family who experienced “snakes in a house.” David Collins reported for Baltimore’s WBAL-TV (Snake-infested Annapolis home rattles owners; wbaltv.com; June 5, 2015) about the snake infested home. Detailing the new owners’ nightmare; they said they used a machete as defense against snakes that reportedly dropped from ceilings, and slithered from the walls.

To rid the home of the snakes, the owners described how they ripped out walls, and tore up the ground around the foundation. However the report indicated that “experts” told the owners gutting the home may not guarantee the snakes would return because the snake pheromones and musk could attract new snakes; and that the home should be left vacant for fifteen years to rid the home of the musky odors.

The new owners allege that their insurance will not cover a claim, nor is their mortgage lender willing to help. The new owners are suing the real estate agent and broker for allegedly not disclosing the snakes; there are also allegations that the tenants who lived in the home prior to the sale, moved out because of snakes.

Legal experts across the country have weighed in on these extraordinary stories, only to illustrate how a seller’s obligation to disclose varies regionally. If you are selling a home and have questions about your obligation to disclose, consult your real estate agent and your attorney.

Google+
Copyright © Dan Krell

If you like this post, do not copy; you can:
reference the article,
like it at facebook
or re-tweet.

January 16, 2015July 16, 2019

Due diligence when buying a home

If you’re a home buyer who’s ready to jump into the housing market this spring, you’ve probably begun searching to see what’s on the market. You may have already met a real estate agent or two; and if you’ve haven’t yet talked with a mortgage lender for a prequalification, it’s probably high on your priority list. Exercise due diligence throughout the home buying process.

Before you know it, you’ve selected an agent, mortgage lender, and title attorney to assist you. Then you find yourself searching for homes. Guess what? You’re well into in the process of buying a home! But before you put the buying process on cruise control, how much trust should you put into the professionals helping you?

Exercise your due diligence when buying a home.

It’s not to say that real estate agents, loan officers, home inspectors, or anyone else assisting your home purchase are not qualified. But then again, some professionals are better than others. Buying a home is probably one of the biggest purchases you’ll make during your life. The saying “trust but verify” should be your mantra throughout the home buying process to ensure you exercise due diligence.

Have you verified the credentials of those you’ve hired?

Believe it or not, there are some who are doing business without the authorization of the corresponding licensing agency. And yet, some reasons given for not having a license may sound innocuous, such as forgetting about a license renewal deadline; other reasons may not seem as innocent (for example, licensed professionals from neighboring jurisdictions, DC or VA, attempt to do business locally where they are not licensed).

Professional licensing is a regulatory safeguard that provides consumers a pool of professionals that meet or exceed a minimum professional competency. Agencies such as the Maryland Real Estate Commission; Maryland Home Improvement Commission; Maryland Commission of Real Estate Appraisers, Appraisal Management Companies, and Home Inspectors; Office of the Commissioner of Financial Regulation; and the Maryland Insurance Administration offers an internet portal to verify a licensee’s status, check for disciplinary actions, and also explains how to file a complaint.

Although the MLS strives for accuracy in home listings, there are inaccuracies. The MLS provides guidelines and standards for home listing data. However, exactness and truthfulness can vary because data input is performed by many agents and/or their staff. a disclaimer used by our local MLS prompts you to verify MLS listing information,

“Information is believed to be accurate, but should not be relied upon without verification. Accuracy of square footage, lot size, schools and other information is not guaranteed…”

Verify the schools are accurate.

You can verify schools by checking with the local school board. Our local school board has an online tool to check schools assigned to any county address. The tool is located here: Montgomery County Public Schools “School Assignment Tool” (gis.mcpsmd.org/SchoolAssignmentTool2/Index.xhtml).

Verify zoning, development and other information

You can verify zoning or development questions with your locality. Montgomery County allows you to check information online via Montgomery County Planning Department (montgomeryplanning.org).

Verify permits.

Sure the deck is beautiful and the basement is fully finished. But how do you know that they were built to meet county code? Maybe the home seller went with the lowest priced contractor who cut corners and did not pull a permit. Or worse, the seller did it themself to save paying a licensed contractor. Make sure any improvements and recent repairs have had the proper permitting! The permitting process certifies that repairs/renovations comply with building and zoning codes. Permitting ensures that houses are safe, structurally sound, and meet health standards. Permits can be checked by contacting your locality. Montgomery County allows you to check most building permits online via Montgomery County Department of Permitting Services (permittingservices.montgomerycountymd.gov) “eServices” data search portal.

Most home buyers are familiar with basics of the home buying process. However, “trust and verify” can help identify and reduce hidden and obscure risks. Exercising your due diligence can make your home buying experience increasingly trouble free and more enjoyable.

By Dan Krell
© 2015

Original located at https://dankrell.com/blog/2015/01/16/trust-and-verify-home-buyer-due-diligence/

Protected by Copyscape Web Plagiarism Detector

December 18, 2014November 23, 2021

Real estate professionals reputation

Gallup (gallup.com) conducts a regular poll of ethics and honesty of various professions. Although the survey is not inclusive of all professions, many are covered in alternating years. Results from the 2013 survey ranked the top five professions as (along with their corresponding “Very High/High” rating) nurses (82%), pharmacists (70%), grade school teachers (70%), medical doctors (69%), and military officers (69%). At the bottom of the list we can find lobbyists (6%), members of congress (8%), car salespeople (9%), state office holders and advertising practitioners were tied at 14%, and lawyers and TV reporters were tied at 20%. Where do real estate professionals rank?

Real estate agents were included in the 2011 Gallup Ethics and Honesty survey, where they were rated with a 20% Very High/High rating; which would be toward the bottom of the list. The 20% rating is actually an improvement from the 17% rating given in 2008. Believe it or not, the 20% rating seems to be the highest rating achieved by real estate agents since the first time they appeared in the poll in 1977; and 2011 was the second time for such a rating (2005 was the first). Historically, the rating ranged from 13% to 19%; not surprisingly, the lowest ratings seem to coincide with housing market slowdowns.

The “Very High/High” rating used to compare consumer opinion of professions may be a little misleading. The 20% “Very High/High” rating in ethics and honesty could lead one to believe that agents are generally viewed negatively. However, in 2011 the “Low/Very Low” rating was 22%; while the 57% “Average” rating may be more indicative of consumers’ opinion of real estate professionals ethics – which is indifference.

The National Association of Realtors® has for years tried to influence public opinion of Realtors® and the industry (not all real estate agents are Realtors®; Realtors® are members of the NAR), by publicly promoting the high ethical standards by which Realtors® are held. Many are unaware that a code of ethics was adopted in 1913 by the association (which was then called the National Association of Real Estate Boards), and has since strived to instill and maintain a high level of integrity in the field.

With such emphasis on ethics, you might expect that public opinion would be much higher. Unfortunately, the limited research on consumer perception of ethics is mixed at best. And according to one study, consumers consider price, quality, and value more important than ethical criteria in purchase behavior (The myth of the ethical consumer – do ethics matter in purchase behaviour? The Journal of Consumer Marketing. 2001;18(7),560-577.)

The reality may be that consumers are not necessarily concerned about ethical behavior or honesty when hiring real estate professionals; which may be why the NAR has decided to add a compulsory dimension of “value” for practitioners so as to increase public opinion of the industry. In an effort to increase professionalism standards, the NAR recently approved an “aspirational” Code of Excellence. A report on the November 10^th NAR Board of Directors meeting stated (realtor.org):

“The goal is to raise the practice of real estate measurably through increased training in the competencies that consumers value. These competencies include the stewardship of property listing data, privacy and security of consumer information, advocacy of property rights, community involvement, and technology.”

NAR President Steve Brown was quoted to say, “This is the first step in a process for the continuing improvement of our profession…”

Original located at: https://dankrell.com/blog/2014/12/18/changing-the-publics-opinion-of-real-estate-professionals/

Can real estate agents with high emotional intelligence get you a higher sale price?

Google+ Copyright © Dan Krell

Exercise your due diligence when buying a home.

Have you verified the credentials of those you’ve hired?

Verify the schools are accurate.

Verify zoning, development and other information

Verify permits.

Google+
Copyright © Dan Krell