June 2015 – Your Real Estate Matchmaker

More than 60% of home sellers choose the first agent that visits their home. Wow! Does that mean the majority of real estate agents are great? People are so blown away with the sales presentations and marketing plans they need look no further? I would say, NO. As much as that statistic would make my day if I could somehow find the way to be the first one to home sellers’ doors; I don’t believe the majority of agents are “great” or “outstanding” . I would suggest that more than likely, the public is not aware of what makes the difference between a good agent and a great agent until they are well into the sales process and they’re already under contract. Because buying or selling a home isn’t usually something done with frequency, how would one know what they SHOULD expect? Well, I think as a Realtor, I’m in a unique position to give an idea of what separates bad, good, and great agents. Why? Because I’ve heard a lot of complaints and even nightmare stories over the years. I have heard the shortcomings of agents as well as some spectacular acts of service. Let me share with you a little bit about what I believe home sellers & buyers should expect from an agent.

1. Do they make you feel comfortable in their presence? That may seem like an odd requirement but buying or selling is a big transaction. Don’t work with someone that you don’t feel comfortable with. You should feel like they are trustworthy, that they have your interest in mind. They should be listening to you and asking you questions to find out your needs. Trust your instincts.

2. Do they have a plan? There’s a little differentiation here between buyers and sellers. For buyers – the agent should be asking what your “dream list” is and be taking notes. They should be getting to know you and what is important to you and offer to put together an automatic search for you. They should be flexible with times that work for you – that is not saying they’re going to clear their schedule the next day and make you their only priority. They should offer you information on the community; events, schools, etc. Sellers should find that an agent comes to their first appointment well prepared and professional. They should already have done background work on your home’s information. They should have printed or online material about themselves, and the company they represent, ready for you. A great agent should be able to walk through your home and point out the pluses and also those little things you may want to change to make your home more sale-able. They should be able to sit down and specifically give you a marketing plan for your home – don’t settle for someone who just says they have a great marketing plan. You should be able to see it in black and white right there. It should involve a multi-faceted approach – online (websites, FB, MLive), print, etc. Find out if they’re a member of your local board of Realtors. If you live near a county border, be sure they’re a member of the neighboring board too, or at least have guest listing privileges there. You need to make sure it will be listed in both places.

3. What is their route of communication? One of the biggest complaints from sellers that I hear is, “They stuck a sign in my yard and I never heard from them again”. That should never happen. You should have some type of weekly interaction. Even if there hasn’t really been an event for them to report, they should be calling or emailing (your preference) about what stage they’re at in their marketing plan and what they plan to do differently the next week. A buyer’s agent should be auto sending new and reduced listings any day they appear and also keep in touch with your situation to be sure nothing has changed.

4. Are they full service? This is a time where not every brokerage out there is full service. You will find discount agencies. Note: THERE’S A REASON they’re called a discount agency. They will not be handling all the details for you – before a contract, nor during, nor after. I had my first encounter with working with a discount broker last year. I had a buyer who was interested in a home that was listed with a discount broker. It was a flat fee company that put a sign in the yard and listed it on the MLS and that was about it. We went to make an offer and were told to work directly with the seller. The seller was absolutely confused, they were also not prepared to negotiate with an expert negotiator (me). They ended up walking away – their agent was not even aware. Three weeks later their agent called to find out the status of the deal only to find we’d purchased another home. Be sure your agent is full service! Be sure you sign a contract so they are legally representing YOUR best interests; whether you are a buyer or seller.

To wrap it up; a bad agents tend to be pushy and hard-sell, most likely impatient, and want you to decide everything at that moment; a good agent will say they know your area, be professional, list your home on the MLS and some websites. A great agent will prove they know your area, show you their plan, come prepared, take time to listen and answer all your questions regardless of the lengthy number, list your home with a multi-faceted marketing approach, stay in communication, and make you feel like you are in the hands of an expert – because you are.

When you see a Realtor pose a question about a For Sale by Owner (FSBO) versus Realtor you may naturally assume I’d side with using a Realtor. But you may not know that I am one of the few crazy people who can say, “I love to do research!”. After beginning to design a marketing campaign geared toward assisting FSBO’s; with the hope that they may end up listing with me down the road – I decided to find out the real answer to the above question, “Won’t I net more as a FSBO versus using a Realtor?”. It sounds logical, right? What does the research say? Also as importantly to me, what are the motivating factors that cause people to try selling their own home, aside from believing they will make more profit? And so began my search…..

Statistics showed a resounding “NO” to the title question. You will not make more money selling your home by yourself. Not only that, but FSBO’s take an average of 19 more days to sell. Also when you consider that about 20% of FSBO’s end up listing with an agent, that average lengthens to an extra 68 days. The average difference between what homes sell for with a Realtor and FSBO more than compensates for the brokerage fee. The national average broker fee is $15,000 but the average amount Realtors garner versus FSBO in home price is $40,000. So, statistically speaking, you should be ahead of the game both financially and time-wise by listing with a Real Estate Professional.

While reading through dozens of articles online, I tried first to focus on institutions for the research facts, like the National Association for Realtors and independent entities like Quicken Loans. After that I switched gears and read some blogs and personal testimonials of people who sold or unsuccessfully attempted to sell For Sale By Owner. I wanted to know what their biggest hurdles were in the process and as stated earlier, why they went that route in the first place. Let’s take a look at those hurdles first.

Ever hear of or been a parent who was confused by their 6th grade child’s math homework? I remember being confused when my 2nd grader came home with math and it asked for her to rename the equations. I had no idea what that meant. After being stumped for half an hour I finally called the teacher, feeling like an idiot – only to be told that renaming was what we had called borrowing back in my day. Oh – pretty simple subtraction. So here I am a college graduate twice over, stumped by 2nd grade math. Why? The language. It appears that FSBO sellers biggest hurdle is the paperwork, the language. It’s not because they’re not smart, but unfamiliar. Did you know you can lose out on thousands of dollars just by having your taxes prorated in arrears if you’re in an area that customarily does them in advance? By not being familiar with language in the Purchase Agreement or title work – it could literally cost you big bucks.

How about pricing? As a home-owner it’s not easy to pull up what all the neighborhood homes have sold for. Sold prices are what appraisers and Realtors use to assess your home’s value. Current list prices don’t necessarily reflect value. If someone isn’t willing to pay it; it isn’t worth it. Combine the difficulty of finding sold comps and accurately pricing with the fact that only 2% of interested buyers will look at your home if they believe it to be even 10% above Fair Market Value – you could be in trouble. The first three weeks are crucial when selling a home. It is by far the greatest period of activity. If your price isn’t right from the get-go, you are eliminating a huge number of prospects.

I would state that especially in a market like Mid-Michigan; the inability to effectively market a home is the greatest trial of a FSBO. It is true there are more options for marketing now than in the past, but it just isn’t possible to get down all the avenues without having it listed by a Realtor. When I list a home it goes to more than 1000 websites. Considering that 43% of people first find their home online; that is an important factor. The second biggest way people find homes is directly through a Realtor, 33%. The largest piece of that 43% of people who find homes online first; is marketing done by Realtors.

I’m surely not saying that selling your home yourself is impossible. In some markets, you may have the perfect home in the perfect location and it will fly right out the door. Looking at the cold hard facts though, your Realtor could be worth their weight in gold – – ok, maybe not quite but an average $40K higher is pretty good, plus you don’t have all the headaches. I do want to note that aside from “saving” money, the other biggest reason people list their own homes is because of previous experiences with a bad agent. Yup! They’re out there. I’d like to write a little bit more on that – what’s bad, what’s good, what should you expect? Since I can’t wrap that all up in a two sentence nutshell; I’ll put it in my next post.

If you are currently listing your home FSBO and are having a hard time, please feel free to message me. I’d be more than happy to help you out, no matter where you are – no pressure, just good advice from years of experience. Have a super awesome day!

Here are a few of the first articles I read. The Public Relations Princess testimonial by Claire was a great insight from a FSBO experience.

http://www.realtor.org/ http://www.quickenloans.com/blog/sale-owner-pros-cons-seller

http://visual.ly/realtors-vs-sale-owners http://www.realtor.com/advice/why-fsbo-sales-fail/

http://www.publicrelationsprincess.com/2012/07/for-sale-by-owner-vs-hiring-a-realtor-a-true-story.html