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FAQ: Limited Market Exposure Tactics in Real Estate and Their Financial Impact on Sellers
TL;DR
Sellers can gain a competitive advantage by rejecting 'I have a buyer' offers and pursuing full market exposure, potentially securing hundreds of thousands more through bidding competition.
Agents use private transactions with commission cuts to create immediate certainty, but this limits exposure and reduces potential sale prices compared to competitive market bidding.
Transparent real estate practices that maximize market exposure help sellers secure fair value, reducing financial stress and promoting trust in housing transactions.
Scott Spelker reveals how 'I have a buyer' tactics can cost sellers $170,000 despite appearing favorable with over-asking prices and commission reductions.
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The content examines how real estate agents use limited market exposure tactics like "I have a buyer for your home" marketing, which can cost sellers substantial money by preventing competitive bidding scenarios that might yield higher offers.
Scott Spelker heads The Spelker Team in Madison, New Jersey and provides a specific scenario where a property estimated at $989,000 on Zillow is sold privately for $1.03 million, but might have fetched $1.2 million through competitive bidding, costing the seller $170,000.
Agents contact homeowners claiming to have a ready buyer, suggest listing at a price like the Zillow estimate, then bring in their buyer with an offer above asking while offering commission reductions, creating the perception of a favorable outcome without exposing the property to the full market.
Sellers accept them because of the certainty of immediate execution (appealing for those with time pressure), the "over-asking" framing that feels like a victory, avoidance of the disruptive showing process, and the tangible benefit of commission reductions that feel concrete compared to speculative higher prices.
In the example provided, a private transaction at $1.03 million with commission savings of approximately $10,300 compares unfavorably to potential competitive bidding that might yield $1.2 million, resulting in sellers leaving $170,000 on the table despite perceived benefits.
Sellers perceive winning on multiple dimensions: receiving a price above the Zillow estimate, reduced commission costs, and quick execution without the disruption of showings and extended market exposure.
Agents typically offer a one percentage point commission reduction (approximately $10,300 on a $1.03 million sale), which provides sellers with a tangible, easily calculated benefit they can point to as evidence of effective negotiation.
The foregone competition problem refers to the substantial value sellers leave on the table when they accept private offers without exposing their property to full market competition, where multiple offers in a highest-and-best situation could yield significantly higher prices.
Readers can visit Scott Spelker's website for more information about him and The Spelker Team based in Madison, New Jersey.
Curated from Keycrew.co
