Frankly, the issue of listing a property with the same broker who didn't sell it during the initial listing period is a question that's baffled me since I started selling real estate way back in 1971.
In case you don't understand what I'm talking about, let me explain so you, too, can join in my communal head-scratching session.
OK. So, when a property owner hires a real estate agent (in fact, they're really hiring the brokerage firm for which the agent works), it's called "listing" your property. The means by which you "list" your property with a broker is called a "listing agreement," which is really an employment contract.
The property owner hires a real estate brokerage (through the broker's agent) by way of an employment contract that's called a "listing agreement." Got it? I'm sure you do.
Now, these listing agreements all have a legally required termination date. This termination date is commonly referred to as an "expiration" date.
HOWEVER, there's NO fixed time frame for the length of a listing agreement; the time frame for each listing agreement is determined by the seller and the seller's agent. What ever they agree is an appropriate time frame determines the length of that listing agreement.
In fact, the time frame can range in duration from 1 day to 1 year or more, depending upon the conditions of the market, the type, quality and desirability of the property, and so on.
Regardless, the fact is, that a listing agreement is legally required to have a specific termination date.
Now, a listing agreement can terminate in 1 of 2 ways - either by being terminated at the time of the closing of a sale that occurs during the life of the listing agreement, or - in the event the house doesn't sell - by expiring on the termination date.
The basic purpose of a listing agreement is to
Since agents and sellers to agree to a fixed time frame, the broker that's been employed by the seller has to find a ready, willing and able buyer to buy the seller's home at a price that's acceptable to the seller within that time frame in order to collect a commission.
Now, literally every day, there are listing agreements that terminate by expiration.
This means that the broker didn't get home sold during the life of the listing agreement and the listing agreement expired.
When a listing agreement expires, it means that the broker - for what ever reason - didn't find a buyer to buy the seller's home.
The most common reason a broker isn't able to sell a home within the life of the typical listing agreement is because THE HOUSE IS OVER-PRICED!!!
Now, there are several other reasons why homes don't get sold during the life of a listing agreement, such as an uncooperative seller that prevents the home from being shown, a bad location (but - that goes to price), or a poorly maintained home (again - this goes to price).
The most common reasons, other than being over-priced, are because the broker:
In my opinion, when a broker agrees to enter into a listing agreement with seller and the broker knows for a fact that the asking price is far too high, the only one who could be at fault for not getting this home sold is THE BROKER.
Real estate brokers (and their agents) are supposed to be experts in the value of the real estate that sells in the areas in which they work.
So - if a broker knows a house is so over-priced that it's never going to sell, it's the broker's fault that the home didn't sell.
BUT - The most amazing thing to me, is when these listing agreements expire, is the sellers - whose home wasn't sold - hire the exact same broker (including the exact same agent) all over again. And, more often than not, at the same asking price.
But - why would you re-list with the same broker - when you already know they didn't sell your home during the life of the FIRST listing agreement?
Maybe, the better question might be, why is that same broker willing to re-list that home at the same price they KNOW is too high?
Someone once said, insanity is doing the exact same thing over again and expecting a different result. Hmmm.
If you think that you have the answer to this question, I'd really love the hear it.
Please leave a voice message for me by pressing the Start Recording button. Or, you can send me an email.
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