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Archive for August, 2017

Don’t get tricked into cancelling by Traditional Full Service Realtors(R)

J. Andrew English J. Andrew English
Monday, August 14th, 2017

One of my goals with the blog is to be able to write about topics that help real people make real decisions. In doing so, this can ruffle feathers on occasion but I’m hopeful that putting real information out there will help sellers in the future.

Today I had a phone call from a past seller in the Houston area. She had cancelled her listing with our firm in early June b/c she had been convinced by a friend of hers that she had to use a traditional full service Realtor to sell her home. At that time, our seller did not have much traffic on her property and she believed the sales pitch from her “friend”. What was that sales pitch? Her friend informed her that she wasn’t getting traffic b/c it was listed through a flat fee brokerage and that her full service firm could sell the home, etc…

So why did the seller call me today? She was kind enough to let us know that her friend couldn’t sell the home and was interested in re-listing the property with our firm. So what happened? The other Realtor secured the listing and priced the property at the same price she had it listed with our firm. 2 weeks went by and the Realtor pressured the seller to drop the price… 2 more weeks went by and… you see where this is going… The Realtor(R) took the listing that she knew was overpriced and knew that was the reason it wasn’t getting action… but did so with the intent of slowly but surely forcing the seller the to drop the price. To the seller’s credit, she figured it out and called her friend/Realtor out on it….

So how often does this happen? All of the time unfortunately. B/c of this phone call today, I went back and tracked our recent Houston cancellations over the last 5 months. What I was looking for was simple… If a seller cancelled with Congress Realty, did they re list it with a traditional Realtor? And if so, did they list it at the same price they had it listed at with Congress Realty… From there. Who sold their homes and at what price? Pretty simple stuff right? If I am to believe the traditional Realtor sales pitch, then we should be able to find some examples of cancelled Congress Realty listings that eventually sold with traditional Realtors. ¬†Again, pretty simple stuff and easy to track b/c of the MLS data being available to all members.

We have the parameters… so let’s look at the data. How many cancelled listings in the last 5 months in the Houston area did Congress Realty have? 6 total. Of these, how many listed with traditional Realtors? 5 of the 6. How many are either under contract or sold? 1 out of these 5 that were re-listed.

So 1 out of the 5 sold with a traditional Realtor… but here’s the catch… That 1 property that sold… the seller dropped the price according to the MLS by over $65,000 in order to sell it.

Where am I going with this…. The MLS is the MLS. A traditional Realtor rarely gives a seller a better chance of selling. Price and location are what matters. The data supports this. Don’t get tricked by friends and other Realtors(R) into believing they have a magic way to sell your home. They don’t. The data proves this.

Would this hold true in other markets? Over the next few weeks I will post a similar comparison in other markets like Phoenix and Las Vegas.

J. Andrew English J. Andrew English
Tuesday, August 1st, 2017

Recently, Inman posted an article detailing the risk of selling by yourself. While I typically enjoy the Inman website, the article below falls under the category of scare tactics. It’s a common tactic used by Realtors who are terrified the marketplace is changing. First, a link to the article:

https://www.inman.com/2017/07/26/8-things-homesellers-risk-when-they-sell-without-a-real-estate-agent/

Now, let’s take a look at the 8 things they have listed.

1) Knowledge – Very rarely do I speak with a homeowner who isn’t aware of every sale in the subdivision. Homeowners live in the community. They see moving trucks, when signs go in the yard, home repair companies, pool builders, etc… well before a Realtor(R) ever sees this. The truth is that most homeowners I speak with are much more knowledgable about their local community than any other 3rd party.

2) Time – The article outlines scheduling showings and requesting feedback so I will tackle these two specifically. Most MLS’s now use an online showing system, thus, scheduling a showing literally doesn’t take more than 1 click. In the event you want to set up your own showings, all it takes is answering 1 thirty second phone call. Feedback – Again, this is now done online in most markets. If a showing service is used, they will request feedback automatically. The same is true with electronic lockboxes. The agent literally has to do nothing to request feedback.

3) Presentation – Realtors are not professional home stagers. Regardless, presentation quite often is more about common sense. Remove clutter from the property, keep the property clean, keep the front landscape in idea condition, etc… All of these things are items the homeowner is responsible for regardless. I haven’t seen too many Realtors(R) mopping the kitchen or cutting the lawn prior to an open house.

4) Marketing – This one is simple – you need the MLS. Realtors(R) rely upon the MLS for everything when it comes to marketing.

5) Negotiation Experience – This one is a hot topic and I feel that I’m in a unique position to give my opinion simply b/c of the # of homeowners we see negotiating their own deals. From my experience, many homeowners are better at negotiating by themselves w/out the use of a traditional Realtor(R) b/c they don’t fall prey to sales pressure. If I am a Realtor(R) selling a 1 million dollar home and an offer comes in at 950k… I stand to make about $28,500 if I can convince the seller to take that offer at 950k. Why would I fight for every penny and risk losing my $28,500 paycheck? On the flip side, the homeowner looks at it differently… The difference in 950k and 1million is a cool $50,000. I’m telling you from experience, I’ve seen some homeowners fight to the death at the negotiation table.

6) Inspection and Repair know How – This one is just ridiculous. Realtors do not inspect homes. In addition, they don’t hire inspectors. Lastly, they don’t repair homes either. Again, this is something that falls upon the buyer and seller. It has nothing to do with a Realtor.

7) Transaction Management – Finally, we have gotten to an area where a Realtor can add value. Ensuring you provide the buyer with the proper disclosures in the proper amount of time is important and Realtors do provide assistance with this. Now, that said, so do attorneys, flat fee MLS providers like Congress Realty, etc… but to be fair, this at least something Realtors do.

8) Closing Finesse – Ok… now this is just ridiculous / borderline just making things up. I feel confident that homeowners know what condition they are to leave the home in at closing. In addition, I have never met a homeowner who didn’t know when they needed to move out.

Realtors absolutely serve a purpose. Buyer’s agents in particular are worth their weight in gold in many transactions. However, the article above is simply using scare tactics to try and scare a seller into using a traditional listing agent. 7 of the 8 arguments posted simply aren’t true or are greatly exaggerated.