Selling a Home is Easy
Real Estate has changed since the internet. There are some REALTOR secrets that your real estate agent doesn’t want you to know. If a home is properly priced for the existing market conditions and is clean, it will sell with little to no effort. In fact, the paperwork, photography, and data entry alone are more work than the actual selling of your home. Websites like Zillow dominate the internet, so as long as your home is posted there, the whole world can see it. It’s worth noting, posting a home for sale in Zillow is free. Its no shock that many real estate brokers speak negatively of Zillow.
More “Buyer’s Agents” than you think Don’t Know What They’re Doing
Let me back up slightly, first. What I’m about to write is not intended to discredit any honest-to-goodness, really good Buyer’s Agent, because a really good Buyer’s Agent has skills that few REALTORS possess. With that being said, many rookie real estate agents start out working with buyers first.
Buyers are easier to locate, and being a logical first place to start, it’s where most new REALTORS cut their teeth. Experienced Listing (or “Seller’s) Agents really dislike this, because it requires a lot of hand-holding with the inexperienced Buyer’s Agent… but yet they earn the same or more than the more experienced, skilled agent. Working with a rookie real estate agent in any capacity is full of potential pitfalls, and while many times the duty of the Seller’s Broker is usually the highest, but they’re often paid the lowest.
Commissions are ALWAYS Negotiable
Despite popular opinion, real estate commissions are not set by “the market” or the law. Real Estate commissions are ALWAYS negotiable, and you SHOULD attempt to negotiate a lower commission if you think it’s reasonable. Selling a home is a big deal, but so are REALTOR’S commission fees. I’ve seen many a homeowner decide not to sell simply because they could not afford the REALTOR’S commission. So, unless you’re working with a Discount Real Estate Broker, selling your home can be terribly expensive.
Listing Commissions are Way Too High
While I’ve always argued that a Listing Agent’s duty is the highest of all in any sales transaction, the commission is still too much money for what the job entails. Selling a home does require the most experienced and competent REALTOR you can afford, but if you’re using a Discount Real Estate Broker, that same guy isn’t as expensive as everyone thinks he is.
Most Buyer’ Broker Commissions are Also Way Too High
This follows our principle that most real estate commissions are already too high anyway – not to insult one specialty more than the other. Again, while this may not apply to the experienced Buyer’s Agent, but when you’re new, finding buyers is always easier than finding sellers.
Even Though Realtors May Work For The Same Company, There is Always Internal Agent Competition.
I learned this early in my days working for a big-box brokerage. Just because a Real Estate Agent is associated with a big name, it doesn’t mean that business will come any easier or faster; in fact, it can be even harder. There’s always someone competing for the same client, even in the same office.
In the old days, I frequently found myself interviewing against my own associates. It’s one thing to compete with different offices, but it’s an entirely different thing to compete with people within your own office. Even though you might earn some credibility working for a big name Brokerage, in the end, it’s an individual competition game. There is a substantial cost (for the REALTOR) to work under any brokerage or franchise. This substantial cost and internal competition goes towards making my next point:
Most of Your Commission Payment Does Not Go Towards Selling Your Home.
It goes towards ongoing and future advertising, ultimately designed to bring in new clients. As stated before, the single largest expense of the REALTOR is based upon new client acquisition.
There are many different real estate brokerage models. Some pay the agent a larger spit of their commission, but have the agent pay fo their own advertising. Some include some form of advertising, but take a larger commission split. Whether it’s a small or large firm, or even an independent brokerage, there’s no argument that their single greatest expense can be expressed in terms of marketing… not marketing to sell your home (sure, your home may be in a picture somewhere), but marketing to popularize the Realtor’s name.
Real estate agents are trying to “brand” themselves and draw in future business. That’s how they found you, isn’t it? As a REALTOR myself, I believe I’m free to say that. So many home-sellers aren’t going to like knowing up to 60% of the commission they pay, in one form or another, goes towards advertising for future clients, not the exclusive marketing and selling of THEIR home.
Being a Successful Realtor is Expensive.
While it may not be too expensive to earn a Real Estate License, practicing as a REALTOR is. There are countless fees, memberships, dues, commission splits (with the office and/or Brokerage, including the Company Franchise) that make Real Estate a very expensive profession. Advertising is not cheap. So unless your REALTOR gets business for free, it can be financially crippling to be competitive.
This is where the Discount Brokerage has an advantage, because, instead of competing head-to-head with everyone for a decent commission, the Discount Broker can be (depending on the real estate services provided) the least expensive approach to selling your home, and for many, that low cost seals the deal.
The Discount Brokerage Model
When Run Correctly, is Better Than Theirs.
Not only can it be better, but it insures the home-owner is paying only for what they need, not what their REALTOR or the Brokerage needs. When sellers know they’re getting the best service and value for their money, something remarkable happens: “word of mouth” causes the business to grow and creates more happy clients. Of all the forms of advertising available on the planet, word of mouth and a good reputation is, undoubtedly, the best.
In a Seller’s Market, a Discount Brokerage is Your Best Choice.
Back before the 2007 recession, it was a near-nationwide, full-blown “seller’s market”. I used to say to my clients, “I could pretty much put a ‘For Sale’ sign on my dog, walk it up and down the street, and I’d come back with three or four buyers.” In a seller’s market, all the REALTOR has to do is to make the home sale known.
In today’s Internet dominated world, it now takes posting in only a few websites to get your home seen by millions of people across the country. By eliminating all unnecessary overhead, a slew of fees and costs can be wiped away. This is great for the seller and the Discount Broker! Discount Real Estate Brokers eliminate most of the unnecessary fees and is free to pass the savings back to the home seller. By charging such a significantly lower sales commission, it opens up many, many options and possibilities for the seller.