The Story About The Three Discount Brokers: Wouldn't (Help), Couldn't (Sell) and Didn't (Know)
The Story About The Three Discount Brokers: Wouldn’t (Help), Couldn’t (Sell) and Didn’t (Know)
Introduction: We want you to be informed about discount brokers. Before you move on to The Story About The Three Discount Brokers there are several things we would like you to consider.
Discount brokers claim they will put more money in the pocket of Sellers by charging a reduced commission. The concept seems simple enough. A broker charges the Seller a reduced commission and thus the Seller nets more for the sale of their property. The problem is that when a Realtor is chosen based solely on the commission charged it means THE most important factors are not being considered - one of those being the sales price of the home. Saving on the commission means NOTHING if you give the savings and more back when the home sells for thousands less than it would have if a qualified Realtor had been hired.
I am confident that I can find and line up 4 agents in row who will step up to an uniformed Seller and reduce their commission 1/4 percent at a time until the commission got down to a point the Seller would sign the listing agreement. In this scenario the Seller would save 1% on the sale of their home. If the home were a $100,000 home, the Seller would save $1,000. OK, $1,000 is a lot of money, but does anyone think that hiring an agent SOLELY in this manner will actually net the Seller $1,000 more? In this scenario we didn’t mention the Realtors qualifications even once. Top Realtors know without a doubt that they can net a Seller MUCH more than the $1,000 the Seller is trying to save. That is why it is VITAL that Sellers educate themselves on WHAT the agent has to offer them.
I believe there are ten traits a Seller should expect from their Realtor. They are proper pricing assistance, elite marketing, negotiating skills, inspection resolution expertise, contract through closing success, trustworthiness, complete honesty, total competency, solid reputation and superior communication. When a discount broker’s office is filled with new and inexperienced agents it’s possible a Seller could get NONE of the items listed above. A discount agent who is inadequate when it comes to determining market values can cost a Seller 5-10 times more than the amount the commission was reduced. In regards to underpricing a home, it is easy to understand how a Seller loses in that situation.
But what about overpricing?
Overpricing can easily have a more dramatic negative effect on the Seller’s net outcome than underpricing. The reason is that once a home sits for a long period the public perceives it to be stagnant and often it is believed “something must be wrong with that house”, when in fact there is nothing wrong with the house, except that it was overpriced from the beginning. Now a Seller must make large price reductions to overcome the new Buyer concerns about the home. Similar to what I said earlier, I am confident I can line up 4 agents in a row who will tell a Seller their home is worth $1,000 more than the previous agent, just to get the listing. This is a disservice to Sellers and in the end it benefits no one. I could go through the other nine traits and explain how a Seller can lose
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