Why should anybody ever list with a 6% Realtor?
Because of the internet and technology, sellers who understand the process of listing and selling a home do not have list with a typical 6% Realtor to sell their home.
With our "fee for service" business model we offer virtually all of the same services that a 6% Realtor can provide for a fraction of the cost. In fact, the odds of selling your home quicker or for a better price may be reduced by listing with a 6% Realtor. The main reason for this is:
The biggest single factor that generates showings and offers is the price. If you are paying a 6% commission, you have to price the property high enough to cover that. By listing with us, not only can the list price be lower, but you retain the right to sell your home to an unrepresented buyer and pay zero commission.
The dilemma of 6% Realtors - Sellers are more educated today and have more options
The challenge 6% Realtors currently face is that sellers are getting more educated and savvy when listing their homes. Since the 6% Realtors can't really provide much more than we do, they get creative with their sales presentations to convince sellers to list with them. Here are the most common sales presentations that 6% Realtors use to convince a seller they should list with them instead of someone like us:
Sales presentation: "Our company has a well-respected name in the business, so buyers feel more comfortable with us."
Reality: Buyers don't care about the company who has the listing; they care about the property.
Sales presentation: "If I have your listing, I'll "market" your home."
Reality: The more vague and non-committal the sales pitch, the better they seem to like it. If you ever hear this, ask, "What specifically would you do?" Don't let them off the hook when they give you more vague answers – probe further and insist on quantifiable specifics! (There won't be any.)
Sales presentation: "If you list with one of those discount outfits, you are going to get "blackballed" and no agent is going to show your house."
Reality: First of all, if you follow our advice and use a real estate company sign and follow the standard showing procedure for your area, your listing will be treated like any other listing. Secondly, all that most buyers' agents care about is earning a commission, they will show your house regardless of what kind of listing it is. If they don't show it, they risk that the buyer will find it themselves, and the agent would end up with nothing. The most of the agents that are making up "blackballing" stories are "Listing Agents" whom would like to get your at 6%, and they don't normally work with buyers.
Sales presentation: "We have lots of buyers referred to us from our relocation business." (As though the odds of finding a buyer are better if they list your house.)
Reality: Any buyer's agent who works for a brokerage company gets the same commission no matter where the buyers come from, including relocation referrals. Assuming their office lists your house, there is still no incentive to sell the buyer your house over any other house on MLS. A good question to ask an agent who gives you this pitch is, "You've known about my house, if you have so many buyers, how come you have never brought any over?"
Sales presentation: "I network with other agents, so I'll get the word out there about your house."
Reality: Most agents who are busy working with buyers don't have a lot of extra time for social events or other functions to rub elbows with other agents. Agents who have time for these activities are typically new and inexperienced agents and that are trying to get established by "networking" with other agents like themselves. Agents working with live buyers use the MLS to search for homes.
Sales presentation: "We'll enter your listing in our book which is distributed to hundreds of supermarkets all over the area."
Reality: Most of these publications are designed to promote their agents. Typically the time lag between printing and distribution is around 6 weeks which makes it out of date as soon as it is printed. Since most of them come out quarterly, the information may already be 4 1/2 months old when it's picked up at the store.
Sales presentation: "I'll send an email to every agent in the MLS so they are aware of your house."
Reality: A lot of agents find this practice annoying, and can make them dislike the spamming agents that do it. Spam filters are used to screen for these type of emails. If agents have buyers looking for a particular type of property, they search MLS, typically not the spam emails they receive.
Sales presentation: "We'll hold an open house and send mailers out to the whole neighborhood."
Reality: Typically established Realtors do not conduct their own open houses, they have a new Realtor in their office do it. A lot of new Realtors hold open houses because they have a chance to meet prospective buyers who may be in the market to buy at some point in the future, and prospective sellers from the neighborhood who are planning to put their house on the market. A lot of listing agents don't hold the open house because they feel they are effective, they do them to satisfy the seller. If you feel that open houses are important, it's very easy to do it yourself!
If you decide to meet with a 6% Realtor here are a couple of things to look out for...
"Exclusive Right to Sell" Listing Agreements
In case you don't already know, the standard listing agreement that 6% Realtors use is called an "Exclusive Right to Sell" agreement. It states that if the house sells while they have it listed, you pay 6%. If they do nothing more than put their sign in the yard and enter the listing in MLS, it's still 6%. If you sell the house to your neighbor or some how found the buyer on your own, you pay 6%.
The "Exclusive Right to Sell" agreement typically has a cancellation clause in it. If you decide to cancel your listing for any reason during the term of their agreement, you can be obligated to compensate them a percentage of the 6% commission for their "hard work" and expenses before you can cancel your listing. This is often thousands of dollars and no other agent can enter your property in MLS when there is another listing active in the system.