Real estate professionals continue to deploy marketing strategies centered on having a ready buyer for a home, despite evidence suggesting these tactics frequently result in sellers leaving substantial value unrealized. The approach, which promises immediate execution and often a reduced commission, creates a perception of a favorable outcome while potentially costing sellers hundreds of thousands in foregone bidding competition. Scott Spelker, who leads The Spelker Team in Madison, New Jersey, illustrates a common scenario where an agent contacts a homeowner about a property with a Zillow estimate of $989,000, suggests listing at that price, and mentions having a buyer ready to purchase.
In this scenario, the agent might bring the buyer in and advise them to offer over asking, perhaps at $1.03 million. To sweeten the deal for the seller, the agent often offers to cut the commission by one percentage point, saving the seller approximately $10,300 on that sale price. This leads the seller to believe they have secured a deal significantly over the estimated value while also saving on fees. However, the critical issue emerges when comparing this limited-exposure transaction against a full market exposure strategy. If the property were listed publicly and generated multiple offers in a competitive bidding situation, the top bid might reach $1.2 million. The difference between the private sale at $1.03 million and the potential competitive sale is $170,000, representing a substantial financial loss for the seller.
Several factors contribute to why sellers accept these limited-exposure offers despite the clear financial disadvantage. The certainty of an immediate sale appeals strongly to those under time pressure from relocation, financial stress, or estate settlement. The psychological effect of an "over-asking" offer creates a sense of victory when compared to the initial Zillow estimate, rather than what the market might truly bear. Additionally, avoiding the disruption of multiple showings and the tangible benefit of a commission reduction make the private offer seem attractive. The tactic proves particularly effective in markets with inventory constraints, where sellers are confident of a quick sale, or in softer markets where the risk of a property sitting unsold outweighs the potential for higher offers.
From an agent's perspective, the incentive structure reveals a misalignment of interests. In a private transaction where the agent represents both buyer and seller on a $1.03 million sale with a 4% total commission, they earn approximately $41,200. If the same property sold on the open market for $1.2 million with a standard commission split, the listing agent's share would be about $30,000. Thus, the agent stands to make an additional $11,200 by controlling both sides of a lower-priced deal, while the seller loses $170,000 in potential proceeds. This dynamic raises questions about fiduciary responsibility and proper representation.
Proper market exposure standards, as advocated by professionals like Spelker, involve listing properties publicly to maximize competition, even if the listing agent has a potential buyer. The buyer can then submit an offer alongside others, allowing the seller to benefit from true market dynamics rather than artificial scarcity. The fundamental question for sellers receiving "I have a buyer" solicitations is whether the immediate certainty and minor commission savings justify potentially sacrificing six-figure sums through limited competition. This issue highlights the importance of transparency and ethical practices in real estate transactions, where maximizing client value should remain the paramount objective.
