In a Complex Market Savvy Sellers Who Get Their Properties SOLD Hire a REALTOR to Net More Money…Says Who? The Washington Post and Satisfied Sellers
via Long Island Real Estate Blog by knetter on 6/23/11
During challenging economic times, people naturally look for ways to cut their expenses to make ends meet. Some people selling their houses in today’s market feel that one expense they should cut is the REALTOR®’s fee for service in order to net the highest amount possible in their real estate sale. On the surface, this decision seems to be logical. However, when put into practice, often the outcome is the complete opposite of the result desired by the Seller. Netter Real Estate takes pride in our collective experience and professionalism and that is the fundamental value that we bring our Seller Clients; we analyze the current market conditions, assess where the Seller’s property fits in the market and arrive at the appropriate price when it is introduced to the marketplace. BUT, as REALTORS®, perhaps you might feel that we have a tainted view on this subject. Fair enough. How about the opinion of a neutral party?
One of the world's most respected newspapers, The Washington Post, weighs in on the value of REALTORs for a successful home sale.
Recently, The Washington Post, one of the world’s most respected newspapers, published an article called “And the Broker Takes a Slice” in which they tell the story of a pair of homeowners and their experience selling their house. They were friends who pooled their resources to purchase a house together a few years ago because they couldn’t each buy on their own but wanted to enjoy the benefits of homeownership as soon as possible. Their circumstances changed. One friend got married, the other engaged so they decided to sell the house they owned together.
In 2009, they hired a REALTOR® and put their house on the market. They did not anticipate how long homes stay on the market these days. With so much inventory being offered at once, Buyers have many properties to choose from and often see many houses before making their final decision as to the one they purchase. In six months, their house didn’t sell and they decided to take the house off the market while they made some improvements to it that they felt would make it more attractive in the marketplace when they returned to it. When they did return to the market, these friends made the decision not to hire a REALTOR® in order to recoup the money they spent on those improvements to the property. Like many Sellers who choose to go it alone, they based their list price on what they heard a property near theirs sold for, $785,000.
The fee for service earned by a REALTOR® on a $785,000 property to the Seller appears large. However, the fee is not earned until the property is SOLD. Before that, the REALTOR®, once hired as the Listing Agent, undertakes an enormous amount of work during the marketing of the property, negotiating offers then finally guiding the transaction to the closing table. In today’s confusing, challenging and ever-changing market, getting a property sold is a long and often difficult task. Because of this, REALTORS® are less likely to accept a lower fee for service. Successful REALTORS® these days especially, earn their fees for service by meeting the challenges today’s market offers. As The Washington Post stated in the article, “There’s never been such a discrepancy between where buyers think they should be buying and where sellers think they should be selling. The REALTOR’S® job is to bring both sides together.”
When these friends put their home back on the market, they used a for-sale-by-owner company that charged a flat fee of $400 that allowed them access to their multiple listing service. They said “Very, very few people showed up.”
After another three months on the market without selling, these friends decided to hire a REALTOR® to finally get the job done. The Washington Post said “In retrospect, [the Sellers] concluded that the asking price — not the commission — was the issue they should have focused on from the start.” The REALTOR® they ultimately hired was familiar with the property these Sellers based their price upon. It turns out that the house had a far more impressive kitchen and the $785,000 sale price included money towards the buyer’s closing costs that the seller chose to absorb so their true net was a bit less than it appeared.
These Sellers were advised to put the home on the market for $749,000, an attractive price for the area that would draw qualified buyers to it. It worked. Within two weeks, three qualified offers were received, two of which were over the asking price. In March 2011, the property ultimately sold for $754,000 — $5,000 ABOVE the asking price. The Sellers happily paid the 5% fee for service — $37,700 — to their REALTOR® for a job well done, a job they could not do themselves.
Sometimes it costs money to make money in the end. Netter Real Estate knows this very well. Each time our staff of real estate professionals is hired to do the job of selling a homeowners property, money is invested in the quality, targeted marketing necessary to attract qualified buyers to it. Since 1949, Netter Real Estate has been earning our fee for service by bringing about successful real estate sales so our clients and customers dreams can become reality. Whether you are a Seller moving on to your next place or a purchaser moving into your new place, Netter Real Estate will be there for you.
Turn to Netter Real Estate for all your real estate needs. Our agents at Netter Real Estate will nurture your family as it blooms by finding the home of your dreams…and right now with reasonable prices and incredibly low interest rates, you won’t have to clean out your wallet to buy it!
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