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Typically, homebuyers don't walk into a local real estate office and say "I would like to buy a home, what do you have for sale?"
You should understand that real estate offices actually serve more to attract real estate agents rather than home-buyers; most real estate companies generate revenue and thus, profits, by charging their agents for space and services in order for them to operate their business. For this reason, many agents simply cannot reduce their commission, as they have to pay the enormous overhead the company has created for them Unfortunately, the elaborate buildings don't help home-owners sell their homes more quickly, easily or for more money Most deals are signed at kitchen tables or in local meeting places.
98% of all home-buyers begin their search for a home using one of five techniques. Prepare your marketing to target these areas and you will increase the number of qualified buyers who view your home effectively peaking the sales price.
Statistics on where buyers found the homes they purchased:
Contacting a Lender.
Many buyers contact a lender to find out what they can qualify for before they begin looking at property.
Most lenders have relationships with specific real estate agents, so when his/her clients are ready to begin looking for a property or estimating the value of their current residence, that lender will most likely refer them to one of a handful of real estate agents who refer business back to that lender.
Contacting a Real Estate Agent.
Real estate agents prepare lists of available homes from the MLS; typically agents do not offer "For Sale By Owner" properties in these presentations for the following reasons: it is too time-consuming, the agents want to support their network, and there is always a concern that the homeowner will not agree to pay a commission to the agent.
It is important for you, as a seller, to know what the agent's motive is when preparing a list of properties for a buyer. When a person calls an agent and asks for a list of active properties to view, the agent views this opportunity as a job interview. The agent wants to impress the buyer and make sure that they secure them as a client. This is important to you because you want your home to be one of the properties in the proposal that the agent submits to the buyer.
The amount of information that can be gained without even speaking to anyone is amazing. Look at this tutorial for instance. By the time you have finished reading this you are going to be armed with
Typically, most of the properties found in print have already been sold, especially in a hot market.
5. Driving around and looking for yard signs
Many people like to find an area they would like to live and then begin driving around that area looking at houses, pulling flyers and/or calling phone numbers off yard signs. 28% of all buyers find their homes this way.
Typically, there are two sides to every home sale: the listing side and the selling side.
The listing side is performed by the homeowner, when
The selling side or the side with the 'Buyers Agent' has the following duties:
When a listing agent is involved in the sale of a house, he/she is typically paid a commission equal to 5%-7% of the gross sales price which is then "shared" with a Buyers Agent. For example, when a house is listed, the listing agreement may call for a 6% commission, and when the home sells, the listing agent is paid 3% of the sales price and the selling agent (or Buyers Agent) is paid 3% of the sales price. The selling agent's commission is sometimes referred to as a COOP.
The Buyers Agent is the agent that has what you, as the homeowner, needs - a qualified buyer. It is this agent that may find themselves searching properties and traveling all over town for days, weeks, and sometimes months before finding the perfect home for their buyer client.
Compare the following sales by the same listing agent
Services Provided: Placed in the MLS, Yard Sign on the property, Showing Management, Print advertisements, Contract Negotiations, Closing Management
Listing Agent - $5,250
Buyers Agent - $5,250
Services Provided: Placed in the MLS, Yard Sign on the property, Showing Management, Print advertisements, Contract Negotiations, Closing Management
Listing Agent - $14,250
Buyers Agent - $14,250
Here you can see that the home owner of sale 2 paid the Listing Agent $9,000.00 more than the owner of sale 1 for the exact same services. The value homeowner 2 received from the listing agent wasn't even close to the same value homeowner 1 received. This "flaw" has not been addressed for years. Consumers haven't demanded a change and no real estate companies have opted to build a company that would provide true and equal value to all property-owners.
To do this, a real estate company would have to compare the current methods of selling property, take the best attributes from each, and then apply a new fee structure that won't vary or fluctuate the value of the marketing systems currently in place. I am still amazed that consumers haven't held real estate agents accountable by requiring reduced commissions for a job that requires only a fraction of the work compared to a few decades ago. I challenge you to identify another industry where economies of scale are implemented but the fees charged and production levels remain the same. I will save you some time; there isn't one! Industries have been redesigned from the bottom up due to this very scenario. Look at the stock trading and travel industries for cases in point.
As you can see, most FSBO companies will charge you up front for services. In most cases, they will put your property on their website and in their magazine and offer you their yard sign if they have one, but this is the extent of the service. If you want additional services they charge you per item; in some cases, they charge an additional $1000 just to manage the closing. The important thing to know is that you pay them up front or monthly, non-refundable fees and expenses, and you are missing out on 70% of the buyers looking for property. That may be why they ask for payment in advance. Over 70% of all For Sale By Owners list with an agent within 90 days due to of lack of activity or a failed closing.
Assisted Sales Agencies
These companies typically offer you
Full Commission Agencies
They do it all for 6-7% of the gross sales price of
Using the information we have learned thus far,
The only things left to determine are:
First, the Flat Fee; for the following services: MLS, internet advertising, distribution to real estate portals, showing and closing management, contract preparation and negotiation of the sale; it is our belief that taking into consideration all overhead and marketing expenses a fair price for such service is approximately $2500.
Second, the Buyers Agent Commission - It is vital to offer a commission that will not deter an agent from presenting your property to their prospective buyers. Too small a commission will reduce the overall value of the MLS, and remember, that is where 70% of all closed deals are generated. In all geographic areas, a typical commission offered to the buyer's agent has been established over time.
This fee is typically between 2.5 and 3.0%. As a home-owner, you are certainly not bound to offer this amount. You may adjust this number and I would recommend using the strength of the current market, the quality of your home, and your time frame for selling your home to determine the commission you want to offer.
This brings us to the best case scenario for listing your property for sale. Your requirements should be the following:
If the listing agent sells the property, the total commission should be reduced to a 3% total commission minus any upfront fees. This would ensure your listing agent's diligence in attempting to sell your home to one of many prospective buyers not yet working with a real estate agent. Why? Because he/she would actually make more money while saving your even more in real estate commissions than originally contemplated in the fee arrangement, a true win-win scenario;
Your property should be displayed in the MLS as well as several Internet real estate portals; the agent should provide full management of showings, contracts, negotiations, and title company closing. You should be able to cancel at anytime with notice and without cost.
Let us know how we can help. Click below to be contacted by one of our customer service reps to discuss the details.
“Selling from out of state (Florida) is hard already,...”
“I began to focus on Fort Collins as a great place to invest in rental properties after seeing it rank repeatedly as a great place to live. Investing from out of state (Florida) is hard already, but Jay made it pretty simple. He knows investors and he knows their needs. Thanks again, Jay for all your help"
“I was totally naive to the whole home selling process...”
“I was totally naive to the home selling process and now I feel like I'm an expert. Fort Collins is really different from my hometown so it took a lot of education for me to be comfortable. These guys and gals are great !”
Having multiple numbers, empty flyer boxes, etc. on a sign are all bad. Our signs give one number, a toll-free number and the caller gets the information that we want them to get when they want it.
Call the main number of ANY other real estate company's sign and see what happens. As a matter of fact, call after hours and see what happens. Even better, call their sign about a specific property and see how long it takes to get even a basic description of the property.
Our signs have a never empty flyer box. CALL THE SIGN ABOVE FOR A DEMONSTRATION. Go ahead! Call anytime 24-hours a day.
At this point, I must say that we have listing programs that include flyers for those sellers that insist on them. We believe in our marketing system but are not so stringent as not to accommodate our clients wants.
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