Why Your Home might not be selling - Posted by Mike (MI)

import · July 17, 2003, 6:51am

Posted by jasonrei on July 19, 2003 at 10:01:00:

I think the whole idea is to sell the house and net a certain amount.
[If you have to pay a bigger commission to motivate a buying agent why not just pay 4% to a listing agent from the start?] Well, if you wanted to go as high as 4% you could, but you want ALL agents to be able to earn that commission.
Maybe a listing agreement where the agent posts the property on MLS (for free) and the 4% commission goes to any agent who brings the ultimate buyer. If that is the listing agent, good for him/her.

import · July 17, 2003, 6:51am

Posted by Mike (MI) on July 17, 2003 at 06:51:54:

Here is an article written by the folks at CBS Marketwatch. I have seen people on here asking why they can not get a buyer, or even a Tenant/Buyer, for their houses. This is pretty good gouge. Think about these things when you are BUYING the house.

Mike

import · July 17, 2003, 10:05am

Re: Why Your Home might not be selling - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 17, 2003 at 10:05:38:

Mike------------

Thanks for the reference.

I think this is a somewhat over-written piece. Several of the “reasons” given for not selling quickly can be collapsed down into the category number 1: too high of price.

I also am dubious that the listing agent makes much difference in the speed of a sale. While a very offensive agent might turn off others and thus reduce the showings of a property, I think this is probably only a fact for extremely unpleasant agents.

Good InvestingRon Starr***

import · July 18, 2003, 8:06am

let me ask you this… - Posted by Tray Giddens, Houston

Posted by Tray Giddens, Houston on July 18, 2003 at 08:06:11:

given your opinion that the full service listing agent is just gravying easy money (over 2.5%) once the listing is achieved, do you believe that a full service listing agent is not trying harder to make a deal work than some entry only broker who’s been prepaid $300 bucks?
it’s 20 minutes worth of work… that’s $900 per hour!! that realtor isn’t worth paying $900 per hour!!! ARE YOU CRAZY!!!

why pay the $300 bucks? tell them that you will pay them $25.00 and nothing more… all they are doing is 20 minutes of work on the computer, any fry cook can push buttons on a computer. they aren’t selling anything, they’re data entry clerks.

Tell me, i’m a realtor in houston, what’s my motivation to talk up a limited service listing property to my buyers over a listing with a full service agent on the other side? i’m looking right at the mls sheet and i know there’s not going to be a division of labor in the process.

is it your opinion that the experience and knowledge of the listing agent is meaningless to get a transaction closed…?

Tray Giddens,Realtor
www.hudsandvas.com

import · July 17, 2003, 12:46pm

One more thing … - Posted by Robert Campbell

Posted by Robert Campbell on July 17, 2003 at 12:46:38:

The article says that you can’t just throw a listing in the MLS … and without savvy marketing … hope that it sells.

I disagree.

If real estate is priced correctly and shows well, the MLS is your most effective platform for marketing and selling. The MLS is where real estate agents do 98% of their searches to find homes for prospective buyers.

As a licensed real estate broker since 1976, I believe the angle that “I know how to market better” used by most real estate agents trying to get listings is simply not true. They dazzle you with colorful brochures and such … but when the property is priced right, looks good, and is placed in the MLS, this is where 95%+ of all homes are solid, not fancy marketing.

Robert Campbell

import · July 18, 2003, 6:19pm

Re: let me ask you this… - Posted by jasonrei

Posted by jasonrei on July 18, 2003 at 18:19:31:

I’m a real estate investor in Houston. I use a limited service broker.

I pay my lister what I do because that’s what the market is. He WOULDN’T list my properties for $25 (wish he WOULD!). Obviously he would work harder for a commission, but my listings are all around town, and I don’t think he’d give me good results. Not just any fry cook can enter data on MLS, it takes a fry cook that has invested time, effort, and money in getting and maintaining a license and REALTOR membership (HAR is CERTAINLY not free!). As for his not being worth $900 an hour, he’s not. But I figure he IS making about $500 an hour. Others I have asked want more!

As a realtor in Houston, your motivation to talk up a limited service listing property to your buyers over a listing with a full service agent on the other side is… your duty and obligation to represent your clients to the best of your ability not to mention the 3% commission I will be paying you. You are their AGENT, we all are your CUSTOMER, that is your motivation.

Also, with me (an experienced and professional real estate investor) there IS a division of labor. In fact, I’m probably more help than most agents would be. You have a question about my houses, call me, I know more than anyone about them. Need a certain document, call me, I have everything on file. Want to present an offer, here I am. I BETCHA I want to sell my house more than anyone else. In fact, sometimes I’m DYING TO!!!

Of course, in the vast majority of cases I think having a good professional representing the seller is a good idea. But why not let the market decide what people’s services are worth? I like my broker, he does what I expect of him. I sometimes like my selling agents. Besides, we all know the escrow officers do all the work anyway.

import · July 18, 2003, 10:33am

Re: let me ask you this… - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 18, 2003 at 10:33:39:

Tray Giddens–(TX)-----------------

Nice to talk to you.

Sounds like I hit a sensitive nerve in you.

No, of course the listing broker does not try hard to sell the property. The broker does nothing or close to it. I do all the work. Which is all right by me.

The amount of work that a listing broker does can be minimal. That is the case when the seller is a person who is sophisticated in real estate and does not need the “hand-holding” that many sellers need.

Perhaps I should have made that point clear. For the seller who is comfortable with it, the discount broker’s listing is a great money-saver. It may not be right for the typical homeowner seller.

However, I can do most of the services that a listing broker provides. I can pull my own comps and determine a fair asking price. I can easily write my sales flier and put up a “for sale” sign in the yard. I can estimate the monthly payments for a new buyer and can communicate that to them. I can clean and paint the house and otherwise make it presentable. I can look at an offer and see if it makes sense without consulting anybody else. I can easily write my own counter-offer. I don’t have any anxiety about the selling process, having gone through it several times.

And paying three to five hundred dollars? Well, I agree, that is a lot of money. But, the real estate brokers have a monopoly. I cannot put a listing in the MLS myself. So I pay the price. Now, the listing broker actually works something like two hours, as s/he has to meet with me, usually a distance from the broker’s office. And, there is overhead to pay: insurance, car, office expenses. So, I think $25 would be way too low.

Now, the agents bringing in the buyers still have their standard situation related to the commission: 3% when I’ve listed. So there is no disincentive for them to work the listings.

I suppose for many people a listing broker is important. For the experienced real estate investor, I’d suggest that the listing broker is only important as the key to unlock the MLS vault.

Good Investing******************Ron Starr

import · July 17, 2003, 3:52pm

Re: One more thing … - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 17, 2003 at 15:52:36:

Robert Campbell–(CA)-----------------

I agree entirely with your viewpoint, and I haven’t even been a real estate agent, let alone a broker.

I have had the big sales presentations of the agents and besides the nice brochures in their “brag books” they also have some testimonial letters from people who felt they got good service from the salesperson. I don’t doubt those are genuine letters and that the writers were pleased with the service they got. I just think that it proves that the agent is good at “hand-holding” for nervous property owners who are anxious about getting their homes sold.

If I want to put a property into the MLS, I hire a “discount broker” who charges a fixed fee to put it in for me, usually about $300 to $500. Saves me the rest of the usual 3% commission. Here in CA that can really add up.

The real sales skill of the salesperson is shown in how many people that person can get to sign a listing agreement for their propreties. After that, most of what they do is just show, to convince the owner that they are active.

I think you are right, the sales come from the agents who have a buyer in tow. How many open houses result in a purchase of the property? Maybe one in fifty? How many of the advertisements in papers? I don’t know, but I’ll bet it isn’t very high either.

Good Investing***********Ron Starr****************

import · July 17, 2003, 3:49pm

Re: One more thing … - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 17, 2003 at 15:49:10:

Robert Campbell–(CA)-----------------

I agree entirely with your viewpoint, and I haven’t even been a real estate agent, let alone a broker.

I have had the big sales presentations of the agents and besides the nice brochures in their “brag books” they also have some testimonial letters from people who felt they got good service from the salesperson. I don’t doubt those are genuine letters and that the writers were pleased with the service they got. I just think that it proves that the agent is good at “hand-holding” for nervous property owners who are anxious about getting their homes sold.

If I want to put a property into the MLS, I hire a “discount broker” who charges a fixed fee to put it in for me, usually about $300 to $500. Saves me the rest of the usual 3% commission. Here in CA that can really add up.

The real sales skill of the salesperson is shown in how many people that person can get to sign a listing agreement for their propreties. After that, most of what they do is just show, to convince the owner that they are active.

I think you are right, the sales come from the agents who have a buyer in tow. How many open houses result in a purchase of the property? Maybe one in fifty? How many of the advertisements in papers? I don’t know, but I’ll bet it isn’t very high either.

Good Investing***********Ron Starr****************

import · July 18, 2003, 11:38am

Re: let me ask you this… - Posted by jay

Posted by jay on July 18, 2003 at 11:38:48:

Ronald, I am told that most buyers agents don’t want to show discount brokerage listings because they assume the sellers are uneducated and will require hand holding. They say that for 3%, they don’t want to play the selling agent and do all the work as a listing agent behind the scene.

What are your thoughts on this? Regards, Jay

import · July 18, 2003, 7:54pm

Re: let me ask you this… - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 18, 2003 at 19:54:57:

Jay-----------

I’ve never heard of the theory that buyer’s agents will not show properties listed by discount brokers. I’d tend to doubt that it is true. A commission is a commission is a commission. Here in CA, where there is more demand than supply, the agents would have to be completely stupid or half crazy to ignore the opportunity to sell a property listed through a discount broker, in my opinion.

Things might be different where markets are less strong.

If you worry about it, I would make sure that the discount broker put something like the following in the listing information seen by agents: “Seller is sophisticated investor, will consider unusual offers.” Something to dispell the presumed problem of agents shying away.

Good InvestingRon Starr*********

import · July 18, 2003, 5:02pm

Let me jump in here … - Posted by Robert Campbell

Posted by Robert Campbell on July 18, 2003 at 17:02:17:

Jay,

From 30 years of personal experience, I have found that a seller is far better off catering to buyers than to buyer’s agents.

Thus, if a property is priced well and shows well, it will sell relatively fast … regardless of who is representing the interests of the seller (an agent or the seller himself).

If you are an experienced seller and don’t mind playing the role of “listing agent”, you would likely sell your home faster by paying $500 or so to put it in the MLS and lowering the asking price by 3% (the normal listing percentage) … and thus making the deal more attractive for the buyer.

Plus, if you happen to be in a strong sellers market, you may only have to offer a 2 to 2.5% commission to the agent representing the buyer.

Robert Campbell

import · July 18, 2003, 6:16pm

Re: Let me jump in here … - Posted by Jay

Posted by Jay on July 18, 2003 at 18:16:49:

Thanks Robert, but that didn’t quite answer the
original question. Let me clarify. What is the best
way to get agents to start showing my house in the MLS when most of them are not interested in showing homes without a listing agent.

Buying agents don’t want to show houses without a listing agent because they don’t want to end up
doing all the work for less pay …3% or 2.5%

Whats the best way to overcome this? Thanks,

import · July 18, 2003, 6:24pm

Re: Let me jump in here … - Posted by jasonrei

Posted by jasonrei on July 18, 2003 at 18:24:09:

Offer a bigger commission to compensate.

import · July 18, 2003, 6:40pm

So what’s the solution? - Posted by Jay

Posted by Jay on July 18, 2003 at 18:40:15:

If you have to pay a bigger commission to motivate a buying agent why not just pay 4% to a listing agent from the start? Isn’t the whole idea to avoid paying full commission? Agents around here aren’t charging 5-7% the way they used to anyway.