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Now, there may be valid reasons to reduce a property’s price. But don’t you want an agent who uses every tool in the toolbox to effectively market the property before they think vaporizing $70,000, $80,000, $90,000 or more of YOUR home owner’s equity is a good idea? If they have a “cut-the-sales-price” mindset as a marketing strategy BEFORE they even put the house on the market --- I fail to see how they are going to be successful in marketing your property effectively --- and get optimum results FOR YOU.
The responsibility lies with you, you need to do your homework. Agents have this attitude because they CAN. Too many sellers sign the listing agreement without doing enough investigation first. So what are things you can do?
Interview more than one agent … two is good … three is better. You need to interview them not only for their competence and skill, but they should also be a good “fit” … for you -- how do you feel working with them? Are they a Realtor© (bound by a code of ethics) or just an agent? They will evaluate your property based on recent sales in your neighborhood, commonly called “comps”. That means they COMPARE recent sales in your neighborhood similar to your property to help set YOUR price, based on comparable sales they've located. Well, if 4 homes in your vicinity are used as comps, it can be VERY interesting to hear each agent’s explanation of how they interpreted the data …listen closely.
Consider the sale price/list price ratio and DOM ---of the agents last 3 to 5 sales --- AND---- of the comps they are presenting to you. Face it, if they are setting the value of MY house based on comps they found --- I want to know everything possible about those comps. To get the ratio, take the sale price divided by the list price … say the house was listed at $850,000 but the sale price was $795,000; so, $795,000 divided by $850,000 = 94% of the original listing “value” was retained. But what if the house sold for $700,000 … the ratio drops to 82%.
A large part of your listing agents job is to MARKET THE PROPERTY in an optimum manner FOR YOU. If their recent history ratio is < 95% it may be an indication of the agents inability to price several properties correctly, and they languished on the market. Ask about their history, listen to their explanation. Understand the data they provide; read on my blog: The difference between Average and Median – "Median Price vs. Average Price. What Does Median Mean?"
DOM = Days on market. How many days a home sat on the market is also an important fact to know for your comps and also your potential agent’s recent history. There can always be mitigating circumstances … ask questions … listen carefully to how they respond. Listen for specific reasons, ie “the seller did not want to make updates to the Kitchen I recommended” vs. “the market is bad”.
Our MLS allows you to search for agents with CLIENT EXPERIENCE RATING. Go to HAR.com home page and Select the blue box “Find an Agent” and you can then enter your zip code and put a checkbox next to “ Display Agents With Client Experience Rating”. After each transaction the experience is rated by a third party, earning 1 to 5 stars … you can read the data … view the graphs, and also read the hand-written comments submitted by the previous clients about their experience with this agent, giving you a very powerful insight into each agent’s professionalism and how they operate.
How do they plan on marketing your property? How much money are they spending out-of-pocket, and where is it being used? The money they are “spending” comes out of the commission they anticipate collecting. For a $1.7 million dollar home, if we use a theoretical 6% commission, $102K is being paid out in commissions. That $102K is first split between your listing agent and agent who brings a buyer to the table, so $102K divided by 2 = $51,000. At this point it is also likely that the commission is split in half once again as, historically, many agents split their fees with their own broker. So $51,000 divided by 2 = $25,500 is possibly what your agent is personally pocketing from this sale.
So why is this important? A SMARTePLAN is .15 per sqft, so the cost for a 3000 sqft house = $450…. And that was considered “too expensive” by some agents marketing multi-million dollar homes --- they’d rather skip that part, keep the money and if the house stays on the market they “can always cut the price”. So understand HOW your agent intends to market your home and how much money they are spending … on staging? On photography? On a virtual tour? On a SMARTePLAN? Make sure your concept of “marketing expense” corresponds with theirs.
Be a fly on the wall and listen in to real estate agents talking amongst themselves. You can go to www.activerain.com and tour through their public discussion archives. This site offers blog space to realtors and currently over 100,000 agents have signed up and routinely blog to the public about the market and their customers. Separately, you can sign up to be a member for FREE, with no obligation, and that will allow you to access “Members Only” posts --- which are not published to the public, but remain available to all members. Read their opinions and explanations in their own words, giving you insight into how real estate agents think. View what they say to each other – which may be different than what they present to prospective clients in a listing presentation.
The bottom line is do your homework! Spend a little time to find the real estate agent that seems to be right for YOU. It’s your money… your call!
Judith, The Floor Plan Lady
Click Here to see Realtors who use SMARTePLANS on their Listings
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SMARTePLANS have photos embedded inside the floor plan that launch with a mouse click .... each photo arrow is positioned in the plan where the photographer was standing --- so you can see where he was and what he was aiming at when he took the shot ... in relationship to the drawing. Beneath the photo is a description of that room. Once the photo launches you have a choice to link back to the floor plan and choose another photo, or read the amenities text for the WHOLE property (not just that particular room). All the files are inter-linked so you can seamlessly click around this property, viewing the photos and reading the descriptions. This is not a video ... you choose what you want to view ... or not. CLICK HERE to View homes on the MLS with a SMARTePLAN
[NOTE: SMARTePLANS are PDF files so they magnify to over 100%. When the file launches, click "View" on the top toolbar and make sure there is a checkmark next to the toolbar named "Select and Zoom". Every time you tap the plus key inside the circle the view screen enlarges (the minus key shrinks the magnification); and the magnifying glass with the plus sign in it marquee selects a specific area of the drawings to be enlarged. Using the hand key and the scroll bars, its easy to move around inside the file, and then magnifying the features you want to see.]
