Selling a Property – Part 1: The Agents
Buying a home, besides being part of the American dream, is one of the greatest moments in most people’s lives. Besides marriage (tongue-in-cheek for some of you out there) and the births of your children, when you purchase a home, especially your first home, there is a great sense of achievement, security, and happiness. You very quickly forget about those wonderful aspects when orders arrive, and you now must face the challenges of having to move. And that starts with selling your current home.
For twenty years, I’ve tried to sell every one of the homes that I have lived in. For twenty years, I have failed to sell any of them by myself. And I have done it all, the sell it by owner programs, paid the reduced amounts to get it listed in the local MLS, advertised in the paper, on the internet; you name it, I tried it. I eventually sold all those homes—after I listed them with a real estate professional.
I will always be truthful with my clients, and in doing so, I sometimes reveal some of the dirty little secrets that most folks, especially other real estate agents, won’t talk about. Why? Because I’ve been there. I’ve been a consumer, a sell it by owner, a real estate associate, and now a licensed broker. Most important, I’m a veteran, and that’s more important than all the rest. So if I have the opportunity to point out a few tidbits here and there to help you make good decisions in the face of significant challenges, then I’m going to do so.
We’ve known several clients who have sold their own homes without a real estate agent. We honestly couldn’t be happier for them, and it saved them thousands of dollars! When people come to us and ask our advice on selling their homes, we don’t immediately jump into the listing sales pitch like 90 percent of the agents out there. You see, it may not be in the clients’ best interests to list their homes with a real estate company. There’s a shocking concept, the clients’ best interests.
They may have paid too much for the property years earlier and cannot afford to pay the professional fees and write a check at closing. They may currently live in a depressed market and didn’t get the appreciation they expected. There are many factors involved, and when we see that is the case, we do everything we can to help them sell it themselves.
Sometimes all we get is a percentage or two for helping them with the legal requirements and paperwork—and the satisfaction that a military family has successfully navigated a major part of their PCS and isn’t hurt financially!
Our agents across the country, even though they may work for different real estate brokerages, share our beliefs and focus on the client. You are the reason Mil PCS, Inc. is in existence. You are the reason we do what we do.
Ah, the reduced commission. One of my favorite topics. It never fails that when we get called to interview with a potential home seller that within the first few minutes, the potential client pulls out the 20 Questions You Must ask a Realtor that they downloaded off the internet the night before. Question 2 or 3 is almost always, “Will you sell my house for a reduced commission?” Or, “What level of service will we receive for a particular commission rate?”
Don’t get me wrong. You absolutely should interview any potential real estate agent. More importantly, you should interview your friends and coworkers. Get their recommendations. Interview the different real estate companies in the area. Interview the local real estate association for your city or town, and find out who the top sellers were. In fact, we do a lot of that for you.
Before an agent can be part of our network, he or she is scrutinized by us. We developed our own checklist and interview that not only tells us the obvious public information but gives us a pretty good idea as to their honesty, integrity, and motivations. We only want agents willing to put the clients’ interests above all else.
A dirty little secret
Now back to the checklists and interviews and reduced commissions. Here in our local town there are agents (and one in particular who is notorious for doing this) that offer to list homes for reduced commissions to say, “Thank you for your military service.” Sounds good, doesn’t it?
Heck, 5 percent instead of 6 percent on a $200K home is a $2,000 savings! But here’s the problem with those agents and those arrangements (dirty little secret). When they list your home in the MLS (cooperative listing service for all the agents in the area), it goes in as a 2.5 percent commission listing. The 5 percent you are paying is split between the listing agent and the selling agent. When another agent has a buyer in town looking to purchase a home, the buyer will ask their agent to print a list of available homes in a certain price range, square footage, and so on.
So that agent compiles a list of possible homes to purchase and may come up with twenty-five homes. If twenty-two of those homes offer 3 percent and yours and two others offer 2.5 percent, where on that list of homes do you think your property is going to be listed? Yes, at the bottom. How hard is that selling agent going to push to sell their client a home that earns them half a percent less in commission? Not very.
Reduced commission takes longer to sell
All other things being equal, homes listed at a reduced commission take longer to sell. If you have moved because you had orders and your house sits vacant for an extra month, there goes that 1 percent you were saving in an extra mortgage payment you shouldn’t have had to make.
What irritates the heck out of me is that these agents offer reduced commissions purportedly out of their so-called kindness to say thank you, when more often than not, all they are trying to do is collect as many listings as they can, so they can sit back and let other agents sell their properties. Remember that notorious agent in our area? Believe it or not, she and her husband actually admitted that verbatim to me in some attempt to prove their business expertise.
Reduced commissions are great as long as you demand that your agent list it at full commission and that they take the full reduction themselves. That would be an honest, “Thank you.”