“Buying the listing” is a Real Estate industry term that refers to the unethical practice of Realtors knowingly telling a home seller that their property is worth more than it in fact is, in order to get the listing.
Realtors know that most home sellers interview more than one Real Estate Agent when deciding who to list their home with. Sellers generally want to generate as much money as possible from their home sale and usually the seller will select the agent who assures them of the highest possible sale price.
Unfortunately, some unethical Real Estate agents knowingly capitalize on this by deliberately inflating the suggested listing price they provide to the seller at the listing appointment in order to win the listing over others who told the truth about the home’s market value.
These agents take the listing with a reasonable expectation that they will be able to persuade the seller to agree to a price reduction later on, once it’s their listing. In the meantime, the Realtor benefits from marketing the home, as one listing often leads to others within the same neighborhood, and attracts buyers that they can represent, often on the sale or purchase of other homes and not this specific listing.
By the time the seller realizes this has happened, their home listing is usually stale, and they end up having to reduce the price, often netting less than they would have had the home been priced correctly at first.
If a listing agent assures a home seller of an inflated sale price, then fails to deliver and asks for multiple price reductions, there’s a good chance they “bought the listing”.
Obviously, interviewing several Realtors doesn’t protect you from this, and in fact increases the chances of this happening, so how can a home seller ensure that the listing agent they choose doesn’t ‘buy the listing’? Always ask the Realtor to show you exactly how they came up with the price and ask them to review the recent comps with you. If the Realtor can’t clearly demonstrate their justification for their suggested price, don’t risk listing your home with them.