Collier Blog

60 minutes aired a segment by Lesley Stahl about real estate discounters that really made the traditional agents angry, here are a few thoughts and the story.

Chipping Away At Realtors' Six Percent

Lesley Stahl Reports How Realtors' Commission Fees Are Under Assault

To respond to several comments made by the "Traditional Agent" Deborah Arends, a top RE/MAX agent in Seattle on the 60 minutes segment, from a local Real Estate "Discounter".

Let me preface by saying I have been in Real Estate for over 16 years and over 10 of those in “Traditional” real estate. Don’t get me wrong, there are sellers out there who want the constant contact, who want post cards mailed to the neighborhood. Some sellers want everything down to the plants being watered and need that, this is a seller who needs a “traditional” agent as the "discounters" can get the job done, they will not call constantly and will do many little things including a mailing to the neighborhood for a small fee. Discounters may even have someone go water the plants teh seller will simply have to pay an extra small fee. Most discounters will ask the seller to assist by only keeping flyers in the box, possibly holding an open house and showing the home to buyers not assisted by a realtor. Many discounters even inlcude showing the property in their services to an unrepresented buyer.

As for postcards, we all know the first batches of flyers are pulled by neighbors anyway so I have never seen the point except to advertise the agent more than the property when it comes to sending out postcards to the neighbors. An apartment complex if the home were in a lower price point would be a better idea to me as you could possibly get a renter to buy. If a seller does not need or require those little extras as many times it is really only advertising the agent they should not be foreced to pay for them. If theseller just wants the home sold by the most economical means and if they choose to use a discount/ reduced fee broker they should have the right to do just that, certainly if the buyers have a buyers agent the agent should be compensated with a comparable commission to any other listing based on the services they perform.

One comment in particular being "Sellers need the staging services of traditional realtors” and To move a property, Arends comes up with a strategy, then creates buzz by blanketing neighborhoods with fliers and sending postcards to notify other agents. She also spiffs up a house for viewing. As an accredited "staging" professional, she polishes, re-decorates and de-clutters. "It is the single biggest moneymaking thing a seller can do, because getting their own belongings out will allow buyers to imagine themselves in the home," she explains. Many discounters offer staging advice, it is included in our Premium MLS with Realtor Assistance program, plus we offer to help set a listing price, prepare contracts, assist in negotiations and inspection, make sure buyers are qualified, assist them with a loan and no we are not mortgage brokers we do not do the loan only make sure they have what they need to get the loan done- and follow everything through to closing just as any Traditional Realtor would, discounters simply do it for far less. As for the “buzz” created in the neighborhood, anytime a for sale sign goes up it creates “buzz” in the neighborhood as all the neighbors want to see what it has to offer and how much are they selling for, as stated previously the reason so many flyers go so quickly in the first few weeks- the neighbors get them.

Another quote from Ms. Arends, ""But perhaps they've left quite a bit of money on the table if it had been put in the hands of somebody that really knew the business,", no doubt this comes from the NAR's statistics showing most FSBO's sell for a lower price than had they listed and sold with a Realtor 2006 National Association of REALTORS® Profile of Home Buyers and Sellers . The main reason for this however is FSBO's simply do not advertise their home to a large number of people. See Free Help for FSBO's which includes statistics from the 2006 National Association of Realtors Profile of Home Buyers and Sellers above. Most FSBO's only use a sign and friends and neighbors to get their home sold while 80% of buyers use the internet and 85% use a Realtor. The same reason the internet allows us to buy products for less, more competition and access to more people looking.

There are companies out there who offer a hybrid business plan between a Redfin and the Traditional broker and many times the fees are less than $3000.00 per sale. Companies like www.Collier-Associates.com the local www.HomesByOwner.com affiliate for Pensacola, Destin, Panama City, Tampa Bay, Sarasota, Port Charlotte/ Punta Gorda, Fort Myers/Cape Coral and Naples actually offer FREE staging advice with their discounted programs and more advertising, customer service and follow up in many cases than some traditional agents. We charge only $629.00 plus ½% of the sales price if a buyer purchases the property with no agent- That’s just over  ½% and we write the Contract, Negotiate it and the Inspection, make sure they Buyer is Qualified, Assist with finding a loan and Follow through to closing. As the property is listed in the MLS and MLS rules state the seller must offer a commission to a selling/buyer’s agent the seller offers in addition to our fees just as they do with any discounter or traditional agent a commission of somewhere around 3% to a selling agent. The difference is we discounters do not keep that commission as the traditional agent does if a buyer calls on the home and buys it without an agent. Let’s see that would be a savings of $12,371.00 on a home that sold for $200,000.00*. 

Because of our lower fees we have actually helped sellers "investors" sell and avoid foreclosure because they simply did not have the equity in the homes they just purchased a year or so ago, where had they used a traditional agent they may have paid money at closing due to paying a higher commission.

 In addition, we do show buyers homes and drive them around in our cars- They get to touch, feel and see and yes we have rebate programs available, up to half of our commission in many cases as it simply depends on how much time we spend. Just as any person working, we all want and must be compensated adequately for our time and liability.

Today’s world loves a savings even if they have to do a little extra themselves, this is the reason Lowe’s, Costco, Sam’s Club, BJ’s and many more are in business today and thriving.

Cary Collier / Broker

www.Collier-Associates.com

Collier & Associates Real Estate, LLC

877-406-6333

* Savings based on sales price of $200,000. a traditional commission of 7% and our lower commission of .50% plus $629.00 assuming no co-operating agent involved.

This is a question many are asking these days. Let's look at some statistics we know I love statistics. I find they really help me make an informed decision. Again the 2006 NAR survey on Buyers and Sellers;

According to the 2006 National Association of REALTORS® Profile of Home Buyers and Sellers, 80% of all homebuyers used the Internet as an information source.

The typical first-home buyer is 32, and has a median income of $57,300. (Source: 2006 National Association of REALTORS® Profile of Home Buyers and Sellers.)

The most popular reason for buying a home is the desire to own a home of their own, desire for a larger home, new job/relocation for a job, change in family situation, desire for a home in a better area, desire to be closer to a job, school, relatives or transit, need for less space, retirement, desire for a vacation home/investment property and purchased home for family member or relative. (Source: 2006 National Association of REALTORS® Profile of Home Buyers and Sellers.)

In 2006, when home buyers were asked about the information sources used in their home search, 85% said real estate agents; 80% responded the Internet, 63% indicated yard signs; 47% said open house, 55% said newspaper advertisement, 8% said friend/neighbor/relatives, 26% said the builder, 34% said home book/magazine, 11% said television, 5% said relocation company. (Source: 2006 National Association of REALTORS® Profile of Home Buyers and Sellers.)

The Active home search time for buyers was 8 weeks of searching and only 9 homes were seen before purchasing their new home.

The top reasons for selecting a real estate agent are agent help find the right home to purchase, help negotiating the terms of sale, help determining what comparable homes were selling for, help with price negotiations, help determining how much buyer can afford to spend on a home, help finding and arranging financing and help finding renters for the buyer's property. (Source: 2006 National Association of REALTORS® Profile of Home Buyers and Sellers.)

Now if we look above we see that the highest percentages in helping a buyer find a home were 85% learned about the home from a real estate agent and 80% responded to the internet lower were the newspaper only 55% and book/magazine only 34%. Other statistics verify this as more and more companies are turning to the internet as their primary means for advertising especially real estate agents.

This tells you one thing for sure- you MUST be on teh internet and really need to be on the MLS if you want to get your home sold! Don't forget it needs to be priced right too.

Another question is why are the numbers so high when it comes to real estate agents and the internet? Simple, people are busy, who has time to drive up and down streets in a neighborhood to find a home? Not many today, people want instant gratification and things made easy also many buyers in today's market may not know the area or values of the homes. The buyers want to make sure they are paying a fair price for the home especially when home prices have fallen some.

Now let's look at another factor, when you are selling your home do you have any sales experience? How many other homes have you sold? Are you comfortable with the disclosures and contracts? Do you understand and know what to include in a contract so you do not end up in a lawsuit? Do you really have the time to answer questions and return phone calls promptly? Remember in most areas of the country today there are between 16-30 months worth of homes available for sale on the market, this means if the number of homes selling today continues and no additional homes were listed for sale it would take 16-30 months for all the homes on the market now to sell, a considerable amount of competition. Another issue is if you are desperate to sell, most often it will show when you are dealing with people, therefore you are actually giving off two messages and yes, I have actually heard this from a buyer recently, first you are saying through your actions and/or the way you speak "I really need to sell this home please make me an offer" and they will either make you a very low offer or will make no offer at all thinking there may be something wrong with your home. The buyer is thinking "wow, why are they so desperate, is there something wrong with the home, if they are this desperate and I see it why has no one else bought the home, maybe we should leave this one alone or make sure we really get a good deal. A real estate agent can be an intermediary, the buyer will never have to deal with the seller therefore will not know if they are desperate or not and most importantly the real estate agent has years of experience in selling homes therefore knows how to answer questions and over come objections as they have the sales experience needed to get the job done.

My answer would be if the reason you are considering selling by owner is to save money, why not use a reduced fee or discount broker to sell your home? In many instances you get the same help like contract & inspection negotiation, buyer qualification and the reduced fee broker will follow everything through until closing plus help you set the right price to get your home or property sold just as any other agent would. They may ask you to keep a flyer box full or if you are out of town will use a 24 hour hotline number to make sure the buyers get the information they want quickly. Plus how many times have you gone by a home listed for sale by a 5, 6 or 7% real estate agent and the flyer box been empty? This is because they can not know when more flyers are needed and few have a set schedule to check their listings. We just saved a couple over $26,000.00 selling a property and we negotiated the contract, pre-pared all the paperwork and are following everything through to closing. Before you list with an agent look into the local reduced fee or discount realtors. You can see our services at www.Collier-Associates.com or the www.HomesByOwner.com sites in the following areas we service note the cities listed are only a few we service the entire county; Pensacola-Milton-Navarre, Destin-Fort Walton Beach-DeFuniak Springs-Seaside-Freeport, Panama City Beach-Lynn Haven-Mexico Beach, Hernando-Pasco-Pinellas-Hillsborough Counties, Sarasota-Bradenton-Parrish, Port Charlotte-Punta Gorda-Englewood-Venice, Fort Myers-Cape Coral-Lehigh Acres-Alva-Estero-Fort Myers Beach-Sanibel-Captiva-Pine Islands, Naples-Marco Island-Everglades City.

If you would like us to recommend a reduced fee /discount broker in another area of the country please send us an e-mail info@Collier-Associates.com

As my mom always said “Don’t step over dollars to pick up pennies!”