NEVER LIST FOR 6%
Educated sellers who understand the process of listing and selling a home would never list with a typical 6% Realtor. The typical Realtor who charges 6% is referred as a “6% Realtor”. They prefer to call themselves “Full Service Realtors” to make it sound like they are providing more than what they really are.
While there are very few things that a Full Service Realtor can provide compared to a flat fee Realtor, many services can provided to you at a fraction of the cost. In fact, the chances of selling your home faster or for a better price are reduced by a 6% Realtor. The main reasons are:
- The single most important factor that generates showings and offers is the price. If you are paying a 6% commission, you have to price the property higher to cover the cost of your commission. By listing with Realmart, not only can the listing price be lower, but when a buyer contacts us about your home, we refer that buyer directly to you. This allows you to save another 3% when no buyer agents are involved. You would not be able to do this with a 6% Realtor. Even if you sold your home to your sister, you must still pay your Listing Broker their commission.
- When a buyer contacts a typical 6% real estate office after seeing a yard sign or seeing the home on the internet, typically, their email or call is treated as a sales lead, not as a buyer lead to direct them to your home. The agent answering the phone makes the same commission if she sells any home on the MLS. The focus is not necessarily to sell your home, the focus is on turning the caller into a buyer-client. The agent may answer a few basic questions about your property, and then move on to questions such as, “How soon are you needing to find something?” or “What is your price range?”; or “Do you also have a home to sell?”; etc. Then, they go on to show that buyer many homes in the hopes that they will want to buy one of them.
This is why many sellers have their home listed with a 6% Realtor without much activity. When the Owner/Seller finally decides list with Realmart, they can drop the price because they have more room to negotiate because of the savings in the listing agent’s commission. You will get more showings from realtors and direct buyers and possibly offers right away. Our yard signs and website directs the buyers to you, so you will never miss a buyer’s call.
COMPLETELY ONE-SIDED LISTING AGREEMENTS
Most people probably do not know that the standard listing agreement that all 6% Realtors use states that if the house sells while they have it listed, you pay 6%. If they do nothing more than put their sign in the yard and enter the listing in MLS, it’s still 6%. Even if you sell the house to your neighbor, your sister, or your friend and the Realtor had absolutely nothing to do with making that happen, you still pay them a their commission. It’s unbelievable that many sellers sign the standard 6% Realtor listing agreement, most probably never reading it. It’s completely one-sided in favor of the Realtor. Worst of all, once you signed the listing contract, you can’t even withdraw it from the market. They will not let you off the hook. You will not be able to list it with another Realtor before it expires. If you sell it within the original llisting period, you will still have to pay your original listing agent their commission. If you ever need to do a 6% listing, do it only for 30-90 days, and extend it for 30 days at a time, if you see that the agent is actively marketing the home for you. You can also ask to build in a unconditional withdrawal into any listing agreement.
THE 6% REALTORS’ DILEMMA – SELLERS ARE MORE EDUCATED TODAY
Sellers are more educated and savvy today than they were years ago. Experienced and educated sellers realized that the 6% Realtor can’t really provide much more than we do at Realmart. Some 6% realtors get very creative with their Sales Myths to convince sellers to list with them. Here are the some of the most common Sales Myths that 6% Realtors make to convince a seller of why they should list with them instead of someone like Realmart.
Sales Myth 1: Our company has a well-respected name in the business, so buyers feel more comfortable with us.
Truth: Buyers don’t care about the company who has the listing; they care about the property. The buyer is not buying a car. The branding of a real estate firm has nothing to do with selling your property.
Sales Myth 2: If I have your listing, I’ll “market” your home.
Truth: Most 6% realtors use vague and non-committal words like “market”. If you ever hear this, do ask, “What specifically would you do?” Don’t let them off the hook when they give you more vague answers. Probe further and insist on quantifiable specifics! such as Open Houses, Professional Photography, Realtor.com showcasing, Listing syndication, Performance Reporting, Flyers, Videos, Virtual Tours, Texting Service and etc. The more specific the better for you. Some of these services are included in our flat fee, or at very low cost. Many 6% realtors only take a few poor quality pictures with their own digital camera, put it on the MLS and call themselves a full service realtor. If your ever going to do a 6% listing, insist on 30 days listing with weekly open houses, and extend only when the agent hosts open houses every week.
Sales Myth 3: If you list with one of those discount outfits, you are going to get “blackballed” and no agent is going to show your home.
Truth: If you follow our advice and use our real estate sign and follow the standard showing procedure for your area, Realtors will not know that your listing is different from any other listing on the MLS. Even if they could tell the difference, it really wouldn’t matter anyway. Buyer’s agents are independent contractors. They do not have any obligation to their broker or other big monopoly listing agents. All buyer agents care about is getting their commission, and they WILL show your house since they are getting exactly the same commission with our listing as any with any other listing. The only agents complaining and making up “blackballing” stories are the local monopoly of listing agents who can’t get you to sign up for a 6% listing. They don’t normally work with buyers anyway. They rely on buyer’s agents to sell the homes almost 99% of the time. They quickly put a “SOLD” sign up as if the listing was sold by them.
Sales Myth 4: We have tons of buyers referred to us from our company’s relocation business. It seems like that the odds of finding a buyer are better if they list your home.
Truth: Any buyer agent gets the same commission no matter where the buyers come from. Sometimes relocation referrals cost buyer’s agent 25-35% of their share of the commission. It actually hurts the agent if the buyers are referred by their company referrals. Even if they list your home, there is still no incentive for their office agents to sell your home over any other house on MLS. A good answer to any agent who gives you this myth is, “Bring your buyer over, you will get paid a commission of ….”
Sales Myth 5: We’ll enter your listing in a sales book which is distributed to hundreds of supermarkets all over the area.
Truth: This is a favorite Sales Myth of some bigger agencies. If you’ve ever seen one of their books, you’d know it contains little useful information and is designed to promote their office and their agents. There is no address or detail. Typically there’s a small property photo, and a one line description like “Big yard – bring the kids & pets”. Even if it had some useful information about your home, the time lag between printing and distribution (greater than 6 weeks) makes it useless. Many of the books come out quarterly, the information may already be 4.5 months old when it’s picked up. Did you ever notice that each page always has a big beautiful photo of the agent. The goal is to promote the listing agent and office, it’s not for promoting your home.
Sales Myth 6: I’ll send an email to every Realtor in the MLS so they are aware of your home.
Truth: Active agents subscribe to the MLS and send buyer new home alerts automatically. Email new listings to all agents simply annoy other realtors, and make them dislike the spamming agents. No legitimate agent reads this spam. If agents have buyers looking for a particular type of property, they search MLS, not their spam emails. And, most importantly all newly listed homes come out on the MLS agent hot sheet along with price changes, under contract and sold homes, and expired listings. There is no reason for an agent to send out email blast out because the home’s already listed on the MLS and the system’s hot sheet.
Sales Myth 7: I network with other realtors, therefore I’ll get the word out there about your home.
Truth: This is absolutely ridiculous. Agents who are busy working with buyers don’t have time for tea parties or bowling tournaments or other functions to rub elbows with other agents. Realtors who have time for tea parties are typically new and inexperienced and don’t have anything better to do than “networking” with other agents. Agents working with live buyers use the MLS to search for homes, not by networking with agents at a party.
Sales Myth 8: We’ll hold an open house and send mailers out to the whole neighborhood.
Truth: Although open houses are important to get buyers into the door to see your home, it’s also giving that realtor the chance to meet prospective buyers and turn them into sales leads for themselves. Most of the time realtors are doing the open house is to give you the impression that they are actively marketing the home when they are actually just promoting their own business. We believe that as sellers you can hold your own open house just as effectively as any realtor, and if you get a buyer yourself, you can save the full 6% commission
Have you heard any interesting Sales Myths lately? If so, please Email firstname.lastname@example.org to us so we can add them here!
BE AWARE OF ANY LONG TERM LISTING AGREEMENT THAT YOU CAN NOT Unconditionally WITHDRAW From on the MLS.
Many 6% agents play tricks to get your listing, and then “hold it hostage”. First they say whatever is necessary to get your listing, even tell you your house is worth more than it really is worth. They usually do a 6 month listing term, so they can convince you to lower your price later on. Perhaps you don’t want to reduce your price because you have to pay that big 6% commission, or maybe you think the agent doesn’t know what she is doing. Maybe you’re ready to list with somebody else. If you want to cancel your listing for any reason, they may demand a “fee” to compensate them for all their “hard work”–called a Protection Clause, whereby they hold your listing hostage for an additional so many months even while it’s “off market”. The reason this often works is that no other agent can enter your property in MLS when there is another listing active in the system. If you want to get rid of the agent, you need to “pay them off”. Make sure to always ask for unconditional withdrawal clause in your listing agreement.