Thread: Evolution of Real Estate Sales

This will get long winded, but it needs to be said. Real Estate agents are selling property the wrong way. Don't start throwing things at me yet.

Here is how agents sell property today:
Hi there Mr/Mrs seller, I will list your property and charge you 6% of the sales price as compensation for that service. I may or may not market your property, and may or may not cooperate with other agents who may have an interested buyer. Seller signs on the line and off we go to enter the property into the MLS and wait for the phone to ring. 6 months goes by and the house never sells, seller pulls the listing and gives it to another agent to basically do the same, or possibly the other agent will spend a few hundred dollars attempting to "market" the property to the local audience.

New market means new thinking. I have started to make the seller pay ALL of the marketing costs. Here is how my conversation goes. Hello Mr seller, I will list and market your property for 8% and you will pay between $3,000 and $5,000 in marketing costs. After they start breathing again and get back to their chair, I explain further. Selling a property is ALL about marketing and agents are not risking their money to market a property that may or may not sell. I tell them to NOT sign with me today, and interview 3 other agents for their marketing plan and who is paying for it. Some seller get it, some don't.

Scenario: 6% commission, seller agent pays 3% to buyer agent, leaving 3% for seller agent compensation and marketing. If the home sells by the buyer agent, the sellers agent is left with 1%-2% if they are lucky after paying their broker split.

Does Nike tell their sales people to go out and spend their own money marketing sneakers, to get a commission of the sale? Not... Nike hires a marketing company to get people into the store. Then the sales people show the client sneakers and close the deal. Sound familiar?

People do not know how to market their homes. We create the marketing plan, fees, etc. Here is the kick, this is not commission so you can benefit from any markup!!!! and not have to pay your broker a dime. As people call in we close the deal. If a buyer comes in from another broker, we split the 8%. if the buyer comes in directly from marketing and advertising, the commission is reduced to 5%. VERY FAIR!!!!!

OK you can start throwing things now....

ahahahahaha

Yeah the problem is people getting burned from paying 6% to a realtor who only throws in on the MLS and waits for another agent to sell it, or right now never getting sold at all...

That is about the most rediculous thing I have heard in quite some time. Please don't take offense as I am sure that their is some sucker out there who would pay you. It seems like you are saying that marketing seems to be the problem and you want to throw money at it. Perhaps a better approach is better marketing. Strategic placement and markting that achieves results. Maybe a little time even - like an open house, if you do it right you can sell the house. Pricing and staging also help. Money for marketing doesn't fix a smelly home or an overpriced home. There are plenty of cost effective marketing strategies that don't cost more money.

I have a feeling this could turn into quite a heated debate , but you have to appreciate the sales pitch!

You have to separate yourself from the competition...

Call me blonde but I don't get it.
Increase the commission AND have the seller pay for marketing? Let's say I'm a lazy agent and all I do is MLS and newspaper add. So I sack the money for advertising I won't do and if I get lucky the home sells and I sack 8% commission. Where's the benefit for the seller?

Well, I agree.
I passed my license because as buyer/investor, I couldn't find an agent working for me, meaning search a property matching my need.
I do get my bums out there for my clients, that's probably why I'm the top producer in my office, who 'sit and wait'...

FlaGal
I understand change is difficult for many people.

The developer chooses the marketing with mutual discussions. They will see where and how their marketing is being conducted. Nobody is pocketing dollars and hoping the property sells to collect the commission.

The commission is reduced from 8% to 6% or even 5% if the marketing generates the lead. It is my job to SELL the property once the lead comes in. The developer will offset their cost of marketing by a reduced commission.

You have to make it a win-win. Why are agents afraid to ask for something different? If you don't ask, you don't get. You have to go in strong. Guess it's my personality.

Let me ask. What do you charge sellers to market their property?
What do you offer the cooperating agent?
What is you marketing budget per home or is it based on price?
How is that working out? (Honestly)

I do not sell single homes, I only market mutiple properties so maybe if this were directed to the average homeowner, you would get a different outcome.

Agents need to charge for their services as a professional. Do you ask your doctor for a discount? I'll bet your doctor would ask you for a discount. Don't play that game. That goes for ALL agents.

7% and I don't discount because we're not a discount brokerage and I'm not a discount agent. I've had a seller tell me XYZRealty would do it for 6%. I didn't get that listing and it stung a bit but nonetheless, I dont' discount.

Originally Posted by FlaGal

Call me blonde but I don't get it.
Increase the commission AND have the seller pay for marketing? Let's say I'm a lazy agent and all I do is MLS and newspaper add. So I sack the money for advertising I won't do and if I get lucky the home sells and I sack 8% commission. Where's the benefit for the seller?

I checked out your web site. Its fine..I work for Coldwell banker also in MA. i operate a site http://www.builderscut.com keep it up
Harry

Checked yours out too. Dang, lots of house for the money on some of your listings!