Why Real Estate Agents Should Turn Down a Listing and Refer Instead

Published October 3, 2022. Updated August 14, 2023. 

Each new listing is potential cash in the bank for real estate agents. Or is it? 

We know it can be extremely challenging to consider turning down a listing. However, in some circumstances, an agent will be better off saying "no" to a new client or listing and referring them to another real estate professional that can offer a fast solution for homes that don't sell quickly. Here's why!

Why Would You Turn Down a Listing?

In a competitive market like the Twin Cities, why would a real estate professional ever think it's a good idea to turn down a property listing? 

Real estate agents can set their own rules about which properties to list and which to turn down based on their goals and cash flow needs. If the idea of turning down a potential new listing sounds completely foreign to you (because cash is king), here are eight reasons why passing a listing on to someone else might make better business sense. 

1. The Client Insists on Overpricing the House

Most buyers are happy to go with their real estate brokers' advice when setting the price of the property. However, some property owners have a very set idea of how much they want to sell their property. 

If a homeowner approaches you with an unrealistic value for their house, it may be best to walk away. You could spend months of your valuable time and resources attempting to sell this overpriced property and reason with your sellers with no success.

2. The Listing is Too Far From Your Niche Market

If a client or real estate investor approaches you with a property in an area a little off your beaten track, declining might be wiser. The amount of money spent on fuel traveling to and from the property for showings or open houses could eat away at your potential profit. 

Man choosing mini wood house model, real estate agents concept.

In addition, the property may be in an area where you don't have many connections and aren't familiar with local regulations and taxation. If the location of a home doesn't make it easy for you to get to the house or sell it within a reasonable amount of time, saying "no" can be a smart decision.

3. An Unreasonable Showing Schedule

It will be extremely challenging to sell a property if the seller only allows viewings one day of the week at a set time. Homes won't sell quickly if they aren't available to potential buyers for showings at times that are convenient for them.

If you have a client that is likely to be inflexible about when potential buyers can view their property, move on.

4. A Personality Clash With the Seller

Not everyone sees eye to eye all the time. Sometimes, you just don't like someone, even if you can't exactly pinpoint why.

Working with a seller you don't like will make the process arduous. Even if the home has good potential to sell quickly at a good price, dealing with unpleasant sellers can make it not worth your time or patience.

5. A Different Property Type Than Your Expertise

If you specialize in selling residential properties in the Twin Cities, trying to sell a commercial or industrial property is likely far out of your comfort zone and area of expertise. Additionally, if single-family homes are your wheelhouse, working with a client trying to sell a condo or duplex could be challenging.

The time and energy spent on doing something you are unfamiliar with will outweigh the financial gain. It's okay to walk away from a home that you may not be in your area of expertise for fast sales at good prices for your sellers.

6. It's a Hard Sell

If the property is in dire need of more than a bit of TLC, it can be wise to refer it to a different real estate professional. 

It could take a very long time to find the right buyer for a property that can't compete with better-quality homes in the market — if you can find one at all. In this case, referring to local home-buying companies like the guys from Homefield Homebuyers would be a great idea. 

Properties that aren't in ideal conditions are our area of expertise! Your client will appreciate you referring them to a cash-buying company that can facilitate a quick sale without requiring any property updates or repairs to close the deal.

7. The Homeowners Have Overcapitalized

A property that is overdeveloped for the neighborhood may also be a hard sell. When homeowners invest in pricey updates that make a home "too" nice for the area, they can often lose money when forced to settle for a lower final sale price that doesn't cover the costs of what they put into the home.

If the sellers don't want to drop their price to suit the area, a real estate agent is better off referring them to someone else.

8. Clients Who Want to Bend the Rules

When sellers who want to violate the Fair Housing Act (FHA) or Americans Disabilities Act (ADA) regulations approach you, run a mile in the opposite direction.

Working with sellers who refuse to follow the rules is not worth your reputation (and potentially losing your license). 

How to Turn Down a Listing

So, how do you turn down a listing? While you might not be the right fit for a specific property, you still want to stay on good terms with the sellers so that they would potentially refer you to friends and colleagues. They might also come back to you with a different sale further down the line. 

Real estate professional showing documents to clients, home-buying companies concept.

Here are some tips on how to professionally turn down a property listing.

1. Honesty is the Best Policy

Let the sellers know why you feel you are not the best fit for your services. In most cases, they will appreciate your honesty and be more likely to refer you or return to you with a different property should the opportunity arise.

2. Beware of Discrimination

If you are declining a seller who falls within a protected class (according to the FHA or ADA regulations), be sure to document the reasons so that your actions can't be misinterpreted as discriminatory.

Make sure your reasons for declining a listing fall within the eight reasons we mentioned above and pertain strictly to what's in their best interest to sell the home. 

3. Refer to One of the Best Homebuying Companies

Don't decline a listing without something of value to offer as a solution to their need to sell their home!

Instead, refer your clients to a real estate professional better suited to their needs. Your clients will appreciate this gesture, and you may receive a referral fee. The right locally-owned home-buying companies can give your clients a quick, hassle-free sale.

Referrals Welcome! We Buy Houses, Minneapolis

Are you reluctant to take on a particular client selling property in Minneapolis and St. Paul? If you're experiencing any of the situations we've outlined today, consider referring listings that aren't right for you to the cash buyers of Homefield Homebuyers.

Our family-oriented cash buyer company specializes in the local Minnesota market and can help your clients make a fast and fair property sale. We deliver fast cash offers at a fair price that can help your sellers see the benefit of your referral to our team. Additionally, we pay all closing costs and offer a percentage of the sale price to real estate agents with a successful referral.

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