Archive for April, 2009

You’re ready to sell your home.  You’ve discussed it with the family, have a good idea of what it’s worth, and you’re ready to make the big move and call a Realtor.

How do you choose a seller’s agent?  Are they all the same?  Do they know the same things? Consider these things before you sign your rights away and either waste a lot of time, or lose a lot of money…

Choose by the company and take the first agent that comes along?

We are inundated day and night by tv commercials about Century 21, Remax, Prudential, and other agencies that are nationwide and very popular.  Does the agency name guarantee a good agent?

Not necessarily.  While the bigger agencies may do more national media marketing than smaller ones…or independents, this doesn’t guarantee that a particular agent will work hard, spend personal money to market your home effectively, have the best website to show internet buyers, or will not try to sell faster by costing you price-wise.

The experts all say that close to 90% of buyers begin their real estate search on the internet for homes, condos, and land. 

Out of the thousands of agents in the country, probably only 1/10 or less of them have spent the money, taken the time to learn about, and utilize the internet effectively.  This should be a strong point in your choice of a selling agent.  Have them show you their website, and check Google to see where it ranks for “Your City Real Estate”.  If it isn’t there, you should probably look elsewhere.  You’ve lost a huge potential for selling your home right there.

Go with a friend or neighbor and/or family members out of obligation?

If you are a buyer, this might be ok. As a seller, it may be the worst mistake you can make.  Your friend may have a good personality.  Your friend’s daughter may have gotten good grades and need a break to kick start her new career.  Your nephew? Well, you may be stuck with that one.

But keep in mind that if things go sour, you may lose a friendship, create a family rift, or be put on the spot to stay with a seller that isn’t a good seller.

Keep it professional and hire a professional .  It’s good to get references, though, so perhaps asking a friend if they know someone, with the stipulation that it not be family, could be a good way to start.

Take the first one you talk to because it’s easy and they’re all the same anyway?

Be lazy in your decision and don’t be surprised after 6 months have passed and you haven’t gotten a bite.

Choose an agent that suggests the highest selling price?

Not a good idea at all.  Real estate is a cut throat profession in many areas.  Many agents will flatter you by over-pricing the property to get that all-important listing contract.  If your house is over-priced, it won’t sell…simple as that.  In the present market with the number of foreclosures, speculators that need to exit and sellers under pressure, you may have to take a lower amount than you had hoped for.

That’s something you should think about up front anyway.  Are you willing to leave your home on the market for 12 months or more and hold out for what you feel it’s worth, or will you concede to the market and sell it quickly? Will holding out really deliver a better price in the long run anyway? It usually does the opposite.

Choose an agent by the lowest commission?

As everyone knows deep down inside, you get what you pay for.  An agent that agrees to take a discount rate is not going to work hard for you. Why would they be working at a discount in the first place if they weren’t desperate for inventory, brand new to the business or failing?  The average 6% sounds like a lot of money.  But by the time the agent splits that with a broker, pays for a great website and real estate marketing, hauls potential buyers back and forth with today’s gas prices, and pays for other expenses that all agents have, that amount isn’t nearly as much as you may think. In fact all across the nation, many real estate offices are closing their doors or struggling to keep them open and advertising and marketing are among the first things to suffer cutbacks in firms that are in trouble.

In addition, often a home is sold by a cooperating agent, and the commission is then split between the two firms.  If the commission percentage is low, other agents are not going to bother showing your house. Worse, some firms try hard to keep their sales in house in order not to have to share their fees. It would be normal for a firm to split roughly 50% of their sales. If there percentage of sales falls much below that, either they are the only game in your town or they are somehow not sharing their sales very well which in fact can be costing you money since your property may not be receiving competitive interest. Does the agency belong to the MLS and do they participate in IDX? If not both, you should look elsewhere.

A good real estate agent will EARN your respect, and every dollar of that commission. After all, in what other line of work do people invest their time and money on the “chance” they will eventually earn a fee? Not any that we can think of.

Do your homework, interview with several people, ask about the websites and other services the firm offers to market their listings. Today there are video presentations for example, new features on websites like this one for example, a blog and other creative new ideas all of which go hand in hand in generating traffic and interest in your listing. Choose carefully and thoughtfully when choosing an agent to sell your home. It will definitely show up in your bottom line at the closing table.

Jan Chilton and Paul Harsch

It’s now possible to visit homes for sale in the Berkshires and neighboring NY and VT any time of day or night, any time of the week or year with the latest innovation in marketing exclusively available from Harsch Associates, a leader in innovative marketing strategies for sellers since 1979.

This latest benefit to their clients offered by Harsch takes about two weeks to produce but once its completed, this unique virtual tour is up and running on www.harschrealestate.com for all the world to see. More than just a tour of the home, the Harsch Associates special approach is artistic, creative and visually attractive beyond the norm. The photography is masterful in capturing unique details and enhancing the appeal of the property by focusing in on highlights that are often overlooked and completely missing from the traditional approach to virtual tours.

Virtual tours have been around in various forms for the last 6 or 8 years. The typical example is now a patchwork of photos taken from a single location in a room thus creating the impression of a 360o view of a given space. Fine if you have a lot of time to watch. These tours can be laboriously long with lots of gaps in between rooms. By contrast, the Harsch Associates tour captures the entire property in 6 to 9 minutes, inside and out and thanks to the innovative approach, it can capture the real essence of the property without needing to include details or parts of a room with objects for example, that you would not want seen on the internet due to high value or personal reasons.

So, no need to hold those long and typically unproductive traditional Open Houses. National statistics prove that only 1% of homes are ever sold through a traditional open house. The professional virtual tours done by Harsch capture the mood and essence of the property conveying much greater appeal to a potential buyer while helping to sort out the qualified buyers from the casual lookers. For Sale By Owners who hope to sell their homes using limited marketing and holding an open house are usually sorely disappointed. If they do eventually succeed in selling themselves, national averages demonstrate they do so usually at a lower selling price with a whole lot more work and risk, than using a broker with all the tools a top flight broker has to offer.

Buyers of FSBO homes understand they have the advantage not the seller and are savvy enough to use that advantage to get a lower price. The seller who had hoped to “save the broker’s fee” not only usually gives that away up front but then loses much more through the negotiating and inspection process, losses that a truly experienced broker knows how to limit or even eliminate completely.

And beware, all brokers are not created equal. There are huge differences between skill levels and results delivered. We are not talking milk here. Agents may or may not be full time, they may or may not have a highly effective web site and the statistics to prove its effectiveness, they may or may not be members of IDX and therefore be able to show literally all active listings on their web site, they may or may not know the best time to have inspections and appraisals done to save you thousands and sometimes even tens of thousands of dollars, they may or may not have full time staff and therefore be able to respond instantly to inquiries or needs, they may or may not have professional office space with privacy for confidentiality within the office, they may or may not have the latest technology in the office. In short, there is a wide differential separating the top agencies from the rest. Even the number of listings may not be a perfect gauge as to an agency’s overall rate of success.

Which agency sells their listings fastest at the highest ratio of list to selling price? At Harsch Associates, listings typically are selling in half the time that their chief competitor takes and much closer to list price. They will gladly show you the statistical analysis to prove it.

The very best 24/7/365 Open House Virtual Tours are available right now at www.harschrealestate.com with more being added each week.

Silly as it may sound, lots of real estate agents — even in a buyer’s market where little is selling — take overpriced listings. It happens every day. These agents who continually write ridiculously priced listings gain questionable reputations among their peers.

So, you might ask, “Hey, who cares?” but an agent’s reputation is important, especially in tight-knit communities like ours. When buyers and sellers sign a purchase agreement their respective agents enter into a 60- to 120-day relationship; mutual trust and respect for each other and cooperation is crucial in helping insure the transaction succeeds in the end. So why do agents sabotage themselves? Or do they?

Sometimes It’s a Deliberate Lie.
As a seller interviews prospective agents, often the estimate of value creeps upward. Maybe the first agent knows there will be two other agents competing for the listing, so the first agent names an unrealistically high figure. The second agent, upon hearing the first agent’s price, beats it. The third agent comes in higher yet.  Or, they simply suggest a higher price than is realistic knowing they will be competing. It’s called “buying the listing” in the trade.

            A seller who chooses an agent based on which estimate is highest is the ultimate loser.

Yet almost every seller operates in this manner. It’s a shame because so few agents take the time or even have the skill to educate sellers that other factors such as marketing plans and the agent’s negotiation abilities are far more important than the list price. The comps speak loudly and ultimately the market place establishes value, not the agents.  Buyers have choices, plenty of them and they are not about to be fooled in to paying too high a price. In fact in this market, they are looking for and expecting downright bargains

Sometimes the Seller has Unreasonable Expectations.

This still doesn’t excuse the agent from explaining how appraisers determine value. The following happened in California but is repeated all around the country.  A home came on the market on a storybook street in a desirable area of Sacrmento, but it was priced $100,000 too high. When asked why, the agent replied, “I know it’s overpriced, but I would have lost the listing to somebody else if I didn’t agree to that price.” Turns out a home two doors down sold for a high figure, but that home had been meticulously maintained, and it boasted a newly remodeled kitchen with top-of-the-line appliances. By comparison, this home was a fixer, but the seller insisted he could get the same price as his neighbor.  

BE AWARE THAT IT DOESN’T MATTER TO SOME REAL ESTATE AGENTS IF YOUR OVERPRICED LISTING EVER SELLS 

Free Advertising for the Agent

Every “For Sale” sign advertises the agent’s company and the agent. Many signs contain the agent’s Web site and cell phone number. Some even sport a large color photograph of the real estate agent.

Think of it like a giant billboard for the agent.

If the home is located on a major thoroughfare, all the better. Probably dozens, maybe even hundreds of drivers pass the sign each day and will see that agent’s name. And after the sign post is in the ground, it’s not costing that agent anything to leave it there.

Agents Find Buyers through Listings

Sign Calls.

If a buyer wants to find out the price of a home, typically they will call the phone number and ask. Agents who are on the ball will try to recruit that buyer to work with them, providing the buyer is not already working with another agent.

Open Houses

Moreover, agents can hold an open house and find buyers that way as well. If the buyer is not interested in the home the agent is then free to show the buyer other homes.

Newspaper Ads

An agent with an overpriced listing often won’t put the address in the paper but will list the details along with the price. That way, buyers who can afford to pay that amount will call to inquire.

Internet and web sites

Perhaps the best form or advertising today is the internet. Choose the agent with the very best web site and by that we mean one that is highly useful to the visitor, one that offers all inventory in the market, one that can do videos, virtual tours or slideshows is best. Capturing visitors is one thing, however keeping them on the site and converting them to actual buyers for your home is the most important. Make sure your agent is truly up to date and internet savvy.

Real Estate Agents Who List Over Market Value Hope for a Price Reduction  

Even if an agent knows she is taking an overpriced listing, she might be telling herself that when the home doesn’t sell within a few weeks, she can persuade the seller to lower the price and then earn a commission when it sells. So she justifies her actions and accepts the listing. The problem with this approach is that studies show that interest in a home typically wanes after a few weeks, so there are fewer buyers for that home when the price falls. Buyers also think there is something wrong with a home that doesn’t sell right away or they worry the seller dropped the price because a major defect was discovered. Price reductions hurt. They hurt the seller, and they often make a buyer wonder how much lower the price could drop. So, a buyer will often offer even less after a price reduction.

Real Estate Agents will offer low commission rates to bag a listing

The second technique some agents use to get listings is to offer lower commissions than the competitors. You might think, “Wow, this is great, lower commission means higher bottom line.” Not so fast. Better ask lots of other questions too, such as how and where do they advertise, take a look at their web site, their office space and staff, their reputation, their skills and track record. Usually cut rate brokerages also get cut rate prices for their listings and the sellers that fell for the low commission wind up with the short end of the stick at the closing table. If an agent is so willing to work for a low rate, they are also likely the type to give in much too quickly in the negotiating process so the cheap rate they charge ends up being very expensive relative to the agent with the higher fee to begin with. Another case of “you get what you pay for”.

Conclusion: Choose your agent based on honesty, ethics, experience, competence and marketing, skills.  Don’t chase after those tossing around pie-in-the-sky numbers or low commission rates. Those are classic and costly mistakes.