By Brian Copeland
2017 President, Tennessee REALTORS®
Editor’s Note: This blog was adapted from a widely shared video that Brian posted on Facebook at THIS LINK.
Hey guys, I wanted to talk to you about a new trend coming down the pike in home selling called ‘instant offers’.
Now, it’s not my job to criticize anyone’s business practice. There are all kinds of ways to sell your home, and however you choose to do it, it’s your choice as a consumer. However, it is my job to educate you on how the market works and what you can do in the marketplace as a consumer.
The way ‘instant offers’ works is, say you’ve had a long day, you’re financially stressed, and you’re sitting at your computer at night, thinking, Gosh, if I could just sell this home for $200,000, all of my troubles would be over.
So you get on the computer and you find a site—there are several of them offering ‘instant’ sales—you plug in, and you say, “I would love to have $200,000 for my home.” There is an investor on the other side of the offer who says, “Yes, I would love to have your home for $200,000.”
It seems like a perfect situation: You’ve got someone to purchase the home at the price you want, and we’re done. But little did you know that your home was actually worth a whole lot more than $200,000, and it’s too late at that point.
The best comparison I can draw to this is the modern pawnshop. Again, there is absolutely nothing wrong with pawnshops; this is a business practice that some people absolutely want to use. But keep in mind, with a pawnshop, you take your merchandise in, they’re going to give you a certain percentage of market value, and they are going to resell it if you don’t come back to claim it, with the interest on top of that.
However, in the home ‘instant offer’ area, you don’t have that option of buying back the home. Once it’s gone, it’s gone. It’s the pawnshop of real estate, without getting your property back. Again, there’s nothing wrong with the process; we just know that if you’re looking at consumers with the pawnshop mentality, they typically fall into three categories:
- They have some kind of fear.
- They are in a stressful situation (when sometimes pride takes over).
- They want something simple and easy.
But I want to talk to you about what the REALTOR® Code of Ethics says about some of these things that we can be concerned about. For example, REALTORS® are not just people who transact property. We are people who sell property, but we also sell it under a Code of Ethics that is over 100 years old.
“…a REALTOR® can have your home priced, on the market and possibly under contract for a fair, competitive price within a matter of a few days. It’s very, very possible. That’s what we’ve been trained to do.”
In the Code of Ethics, there is Standard of Practice 1.3, which says that we must not mislead you on the market value of your home. So if you have this fear of selling your home for the wrong price, we can absolutely give you the right price, and we are supposed to do that, ethically.
Second, Standard of Practice 1.9 says that we must keep your confidence, that your confidential information is good to us, through the transaction and beyond. We must preserve your confidence.
So if you have a stress or pride situation, where you’re saying, “I just want this gone and I don’t want anyone to know,” a REALTOR® is bound to protect your confidentiality.
And then, finally, the ease and simplicity of a sale. What many people don’t realize is that a REALTOR® can have your home priced, on the market and possibly under contract for a fair, competitive price within a matter of a few days. It’s very, very possible. That’s what we’ve been trained to do.
So understand, as you’re looking at the real estate market, perhaps you’ve read this and you have an interest in the value and pricing of a home. This blog [or the video] has likely been shared with you by a REALTOR® who really cares about the Code of Ethics. So give that REALTOR® a call and ask them about the Standards of Practice and about the Code of Ethics and what they can do for you in your real estate situation.
We have always said there is a difference between real estate and REALTORS®. Now, as a consumer, with these ‘instant offers,’ it’s time that you know, there is a difference between REALTORS® and those who just sell real estate. As REALTORS®, we are going to protect you and your price through the Code of Ethics.
There is a difference.