I have recently encountered what seems to be a reoccurring problem in the process of hunting for listings in my farm area. While I typically create a CMA (comparative market analysis) to hone in on the proper list price for a home, I have found that most Brokers, and their associates, do no such thing. I have met with a number of owners who are being approached by Brokers, who are throwing out far over market value prices simply to beat the competition in acquiring a listing. In actuality this is an illegal activity as it breaks the Agency Relationship defined by New York’s Real Property Law. When a listing is acquired by a Broker the owner becomes the client, or principal, of the Broker, where the Broker owes his/her fiduciary responsibilities. Full disclosure, accounting, and loyalty are among the duties owed to the owner by the Broker. Knowingly proposing a list price that is so far above market value in FACT breaks the promises made by an agency relationship where the Broker represents the landlord/owner (which is the large majority of cases). A perfect example is a listing that I recently viewed on Bayard Street, facing McCarren Park. As you can see below, the rental was listed at $3,500 (FOR A 1 BEDROOM), and dropped significantly in price within just 1 month of being listed. Do you think that the listing agent believed that the $3,500 list price was an accurate listing price? By being overly aggressive and pushing prices up so far over market value owners are potentially being put in harms way if vacancy occurs as a result of overpricing. I can cite numerous occasions where owners have lost potential collected income as a result of overpricing. Owners be careful who you work with! Don’t get trapped by overly ambitious Brokers and their sometimes convincing dialogue. Are they on your side?
StreetEasy History (‘something’ Bayard Street)
- 12/11/2011 – Listed by ____ at $3,500
- 01/11/2012 – Price decreased by 3% to $3,400
- 01/17/2012 – Price decreased by 3% to $3,300
- 01/19/2012 – Price decreased by 2% to $3,250