Money for nothing – why?

Is there something in your experience that has prepared you to expect something for nothing? Do not? What a disgusting revelation! But it seems to be universally true: you get what you pay for, nothing more, nothing less. Well, sometimes much less. Occasionally more, perhaps the folks at “Antiques Roadshow” can provide some anecdotes, the $5 garage sale find that should be insured for $17,000, for example. However, I think we all know that these are the exception and not the rule.

So why is it that when it comes to real estate, for many there is an overwhelming compulsion to believe that they can be the ones to beat the system? Perhaps it’s because the perceived rewards are potentially great, and this is the main niche most discount brokers seem to have targeted with their message. Realistically, I think there will always be a segment of the market that has a need to stay in control, regardless of the costs in time and money. And they certainly earn that right by paying dearly in reduced selling prices relative to the market.

According to the NAR, FSBO (For Sale By Owner) sales fell in 2006, from 13% of sellers in 2005 alone to 12% in 2006. This would suggest that the changing market has persuaded some sellers that the rewards of a Selling without representation is declining as the requirements of marketing a home, negotiating the transaction, and guiding all parties and paperwork through escrow have become more time and resource intensive.

Based on this and the fact that nationally the real estate market has slowed relative to the last five or six years of a decidedly seller-skewed market, I’ve begun to wonder what the appeal might be for those sellers who choose go with a discount. or limited service brokerage. I realize we’re pushing a very large rock down a steep, slippery slope, but it seems to me that the disconnect begins with a misconception about what an agent does.

Granted, years of comparison to the multitude of used car lots hasn’t helped our image, but the latest divergence in business models from limited service/discount to full service and the range of options in between has served to cloud even more. plus what was already cloudy. waters

However, what seems to be missing are the agent definitions. According to Webster, an agent is:

1. The one who acts for, or in the place of another, by the authority of him; one in charge of another’s business; a substitute; a deputy; a factor.

2. An active power or cause; one that has the power to produce an effect, such as a physical, chemical, or medicinal agent; as, heat is a powerful agent.

In my opinion, these two are inseparable: an agent must execute the business of another, acting in his place, with his authority and producing a physical effect, in this case resulting in the sale of a property.

Using the term ‘agent’ in any other context related to a real estate transaction is misleading. While a limited service brokerage may have access to the local Multiple Listing Service (MLS) and is authorized to list properties, their value ends once the property has been properly listed. They often do not offer representation, leaving the seller to negotiate their own transaction. And as a broker, they don’t market the property, because once it’s listed, their job is done. So in both agency measures, there is no connection between his actions and the title.

But truly this is only the beginning of my concern. The term ‘marketing’ is generally used to refer to the activities of making a product visible to a market. Whether it’s gadgets or wigs, pumpkins or property, the concept remains the same: in a free-market system, the greater the exposure, the more likely a public acting of its own volition will determine real value, given access. to comparable. information on specific products and available competitors. Keep in mind that the value of a product or property is ultimately determined by what a buyer is willing to pay for it. The larger the potential market, the greater the need for a diversity of marketing channels to ensure exposure is maximized. And this is where the limited service model loses traction: simply adding a property to a listing is not, by definition, marketing.

Even if all property details have been entered correctly, allowing for comparison with competing properties and assuming there is at least one photo of the property, the reality is that a multiple listing service is just that – a constantly evolving and growing list. It is a set of data on the particularities of the properties within a market. Granted, the Internet has made it possible to distribute those lists to a wider audience, but this again assumes that all the information has been entered correctly, that there are plenty of useful and engaging photos, and that a modestly competent copywriter has taken the time . write a few decent lines about the property so that the average prospective buyer feels at least compelled to take a look. My experience says the opposite.

I was introduced to a property by my partner three weeks ago when he recommended I take a look at “this amazing piece of real estate”. On the way back from another appointment I stopped by to see what he was talking about and was lucky enough to find the vendors at home. I was given a tour of their beautiful grounds and the spacious if somewhat dated home. The property was to die for. The house needed some attention to bring it up to today’s decorating standards, but the main issues were the flooring and paint, which are easy to fix. Sellers recognized that they had been relying on the attractiveness of the property and were slowly realizing that our current market is not the ‘run and gun’ model that many sellers have come to expect in recent years.

When I got back to the office, I opened the listing and was surprised to find that the house had originally been listed for 27 days with a single photo taken from 1/2 acre away, slightly blurry and not at all descriptive of the park-like grounds. When the property was canceled and relisted with the same faded photos, the sellers called me to ask if I would be willing to meet with them to discuss listing. We set up a time to meet and I began putting together a custom listing presentation book, specific to your situation and property. The morning we were to meet, he left a voicemail saying he wanted to postpone as they had decided, after getting feedback from a few people, to replace the vintage red shag rugs and needed some time to do it. We reschedule for the following week.

In the meantime, the new book number came out and my partner got a call at this property, requesting a sample. His new client expressed enough interest in the property that they finally looked at it three times, with no offer yet. In the meantime, I had stopped by after the holidays to refresh my memory and take some photos. While I was there, a couple of agents stopped by, composing for a new list they were putting out. I eavesdropped on their conversation, as they echoed the talking points I had begun to outline for my listing presentation: dated interior, fabulous grounds, need for staging, etc.

We met to discuss listing his property (the original listing contract had expired three weeks prior to our meeting, but he was still listed as Active on MLS), and while he seemed interested in my presentation and seemed to agree with the analysis In the end, the fact that he had seen some traffic recently (two agents previewing and my partner’s three demos) led him to believe that he should stick to his current course. (Did I mention we put the 80th day of his listing?)

The most revealing thing happened later that day when my partner called to schedule his last visit; As they prepared to hang up, the seller told him, “Just let your buyers know we’re not expecting a full price offer!”

If I had been representing this seller, I would have lost my mind! Imagine handing over that vital information to the person you are going to negotiate with. Worse yet, imagine that your ‘agent’ was paid $1000 for the pleasure of his services.

What did Cicero say? “Men decide many more problems by hate, love, lust, anger, sadness, joy, hope, fear, illusion or some other internal emotion, than by reality, authority, any rule legal, judicial precedent or statute”. It is still true today.