Why Paying Less to Sell Your Home is the RIGHT Move for today's Sellers
Posted by Mike Askins on Saturday, June 6th, 2009 at 10:00am.Some say discount broker, some say discount realty, I guess what you hear all depends upon who you talk to. So without further ado let me explain the fundamentals of a home sale so you can see why reducing the sales commission you pay is financially important to you.
It is not uncommon to hear traditional realty businesses say, "we don't discount" as if getting a discount was somehow against the law. In reality there is really NO per se "listing discount" because there are simply NO standard listing fees. In the United States setting a price would be considered illegal price fixing or so I am told. In Canada for example the rate a Realtor can charge is set by the state and so it might be illegal to discount.
Well back in the 90's discount brokers generally did have more problems associated with their business models and consumers were reminded of this issue often by traditional brokerages and for the most part consumers paid the full monty to sell their homes. Fees as high as 7% to 8% were not uncommon. However, you need to keep in mind that back then there was no internet, no blog, no information, no Mark Cuban, no yahoo, no google just a void until Al Gore said "let there be an Internet!" and so listings from a Discount Broker could be avoided more easily by traditional agents and the buyers might never know.
Well that was then because today online technologies rules the real estate industry and this has made real estates services more competitive which has resulted in a downward pressure on the cost of services. Heck the internet has put downward pricing pressures on a lot of retailers like the bankrupt "Circuit City" and nearly all bricks and mortar retailers are affected by the internet. With the advent of the internet and high speed online information technologies it is now home buyers and not agents who are actually finding their own homes on their laptops and desktop computers and this is saving agents a lot of time on average and this is how and why agents can now afford to discount their services. What took an agent hours and hours of work in research alone just 10 years ago now takes just minutes to accomplish thanks again to Al Gore. So finding a discount agent today or one who provides incentives to their clients, like ARG just makes good smart business sense.
For example lets say you are wanting to buy a new home but have a home to sell first. Well with ARG's Totally Commission Free Move up for American Legend Homes, Darling Homes, Drees Homes, Highland Homes, Horizon Homes and KHOV Homes you are essentially getting all the benefits of a Full Time Full Cost listing Broker, even open houses if needed, but your cost is nothing, nada, $0, 0%. Although you see no cost as a seller ARG still offers and pays the buyers agent a 3% agent fee. So to the buyer's agent we are just like any other full cost broker with regards to the compensation we offer. We have even paid to stage some of our listings from our own pockets to help get them sold. Additionally we offer our clients low cost high quality cosmetic contractors if necessary to make your home beautiful again so you can maximize the offer you get from a potential buyer.
With ARG we leverage the power of the internet to get your home noticed by the buying public. Additionally we NEVER discount the buyer agent and hence WE DO NOT ACTUALLY FIT THE definition of discount broker as we always advertise a 3% commission to any agent who brings a buyer for our MLS listings. And because our clients avoid the largest single closing cost expense and CAN afford to lower their selling price IF NEEDED and still "net" out the money they need they wind up selling their homes more often as they can be more competitive on price. while listings with a 6% commission burden often times struggle to sell. This is what I call the "ARG client advantage" because IF you have to price your home 6% higher in order to sell what you run into is the inability to find a buyer willing to buy your home for the higher price and so it simply expires months down the road - not a fun conclusion. So regardless of the fees involved your home is only going to sell for what the market will pay and buyers agents will drive this point home when they show up at your door.
When You Are Interviewing Listing Agents, did you ever Discuss the BUYER AGENT FACTOR?
Yes the BUYER AGENT!! The issue in any contract negotiation will always be the same. One agent represents the BUYER and the other the SELLER. It is the classical stand-off. One side wants to make more money and on the other side wants to pay less money. So what I am trying to say is a HOPEFUL starting price for your home will quickly run into 2 common scenarios:
1. NO SHOWINGS OR DISMAL SHOWINGS
2. MARKET COMPS presented by a buyer agent that will justify a lower offer.
So as you can see the macro market dynamics will be the final overriding factor that determines a home's ultimate selling price regardless of the agent commission fees paid and this is why a Realty agency like ARG is so important to you financially and especially so in a recession economy.
Here is what a wise home seller should consider before choosing professional real estate services
1. "Retail sales prices" are OUT! Look at all the distress sales and foreclosures. Do you think a buyer is going to pay more when they can easily buy for less? Do you think the large listing fee paid by the "seller" even crosses a buyer's mind? NO!
2. Agreeing to pay traditional "Full Cost" to list your home does not mean you'll see a higher sales price, but it will mean you will be paying a higher commission expense if you manage to contract and sell your home.
3. Home buyers want VALUE. ~90% of home buyers are serious "price" or "deal" buyers and so you need a "serious" cost effective listing agent to help you neutralize the financial effects of lower offers.
4. Buyer's agents will scrutinize and analyze COMPS and neighborhood sales prices and eliminate all "hopeful" home prices. This will leave you having to lower your price to a point where your net starts to make you dizzy.
5. Bank appraisers are going to be a lot tougher under the new home valuation code of conduct (HVCC) so sellers, even if they get a their home contracted at a "hopeful" price are going to be subject to the new HVCC rule which has caused a number of sales across the U.S. To bust out due to insufficient appraisals.
In the final simple analysis if a seller is only going to get "X" due to overridding market dynamics or have to bring money to closing, then paying a higher lising fee, for many home sellers, just does not make good financial sense.
ARG's No.1 goal from the outset was to provide a more cost effective alternative to traditioanal full cost solutions and to harness the power of the internet so as to allow the public more access to information where they can do a lot of thier own legwork and research on line and in the field. We specialize in the most cost savings New Home Move up program on the planet which greatly enables families to financially connect the dots from your current home to a brand new modern energy efficient home. We can help even if you are considering a lateral move or even a move down. Give us a call and see if we can't exceed your financial expectations.
Questions? Call
at 214-727-3686 - Mobile
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