Blog: R.E. Tales
(Hey, not every place is pretty...)
From time to time I meet folks who want to sell, but who don’t want to list. They want to sell it themselves and avoid paying an agent a commission. That’s totally understandable; you can save a bunch of money that way – if you are willing to pay the cost.
“The cost?” Yes, there is no free lunch. You can lose money by avoiding an agent. Some agents will tell you they can get you more money than you can yourselves. Often, that may be true; their efforts can more than pay for their commission. But not always – and you’ll never know if it was that way or not, not for sure. Irregardless, the more money the seller makes, the great commission the agent gets. If he does not deliver, you are not out a cent – but he is, lots and lots of them.
He can guide you toward the best price you can reasonably expect to get. I need to interject some words here: pricing county property is not a science; it’s an art. Art is subject to interpretation. Each place is different from the last and it is difficult to make meaningful comparisons or draw conclusions. But the agent can do this a whole lot better than either buyer or seller can, simply because he sees so much more property. And he is not hindered by the hubris that makes buyers feel their property is worth extra – simply because it’s theirs. Yes, many do think that way. And he can give examples from his experience to the buyer of why your place is worth what you are asking. If he’s good, he knows these kind of things and can be subtly persuasive.
Understand, there is absolutely no way you can compete with an agent when it comes to advertising. You don’t know all the places he advertises (don’t bother asking; it’s proprietary information – trade secrets). You have one place to sell, he has dozens to spread out the cost over. Are you prepared to spend several thousand a month in advertising? That’s probably what he is doing. How do you compete with that? You can’t.
Can you show the customer multiple properties, so his time is not wasted? An agent can. If you were a buyer, would you rather spend your time with a professional who can show you several places that meet your initial criteria – or would you just call the guy who has only his own to sell? If you are driving hundreds of miles to get here, as most customers do in our area, it makes this an even easier choice for the buyer. As a customer, do you know the local market well enough to see just one place and know if it is a good deal or not? No, that’s one reason to see many.
Many buyers ask that the owner not be present when they look at the property. They want to be able to be frank in their discussions among themselves – and with the agent. There may be things they need to ask or to comment upon that they do not want the seller to hear. They may not want to hurt his feelings if they wish to voice negative thoughts or observations, nor would they wish to give away to him points on which they may wish to bargain. As a seller, you may not want to hear some of this either.
Now, do you really have the time to show 20 or more people your property? Are you willing to change your personal or your work schedule to do this? To jump into action at the drop of a hat? My experience is that for the first few buyer visits, enthusiasm runs high among sellers, then as the process drags out, they start thinking of all the other things they could be doing instead of wasting time with someone who may not buy their place anyway. In a few, mostly urban, markets, it takes very few showings to get an acceptable offer. Not where we are, not normally. Regardless of the market conditions, we as agents expect to take as much time as necessary to do the job. However long it takes, it does not cost the seller extra; we don’t work by the hour or even count the hours. Sometimes we are paid hugely for the time we spend – if you as a seller experience this, consider yourself lucky. Consider the alternative. There are way too many places where my pay after expenses is abysmal. Those few quick and easy sales allow me to absorb the other losses and keep in business so I can help someone else later on.
Does any seller have customers waiting with whom he has dealt with for months? Ones with whom a rapport has slowly built? A good agent can see things with the buyer’s eyes. He becomes trusted and knows when you say “good”, he will know you understand what that means to you?
A seller cannot co-broke. A co-broke is when one agent has the buyer and another the seller. They share the commission between them; the seller does not pay extra even though his agent might end up with half of what he expected. Co-brokes are a common way of doing business in real estate; you do enough of them and you come out equal. Sellers lose this advantage.
Are you prepared to help the buyer find financing so that he can complete the deal? Do you know who to turn to and what they require from any particular customer? Can you recommend lawyers who you know will get the job done quickly as possible and not try to make waves and cause problems that can disrupt the deal, ones who will be fair in price to both buyer and seller? Can you call these lawyers with minor questions and not be afraid they will charge you for that? An agent can – they steer business to lawyers and in return get some free percs they can pass along to those they represent.
When it comes to bargaining, how experienced are you? Wouldn’t you rather have a professional on your side, someone who knows when to give in and when to stand fast, someone who knows how to find compromises that offer benefits to both sides? In the throes of bargaining, emotions can run high on both sides; it’s nice to have a cool and collected third party between the two sides, less they stop bargaining and start arguing. Sometimes it is useful to have someone in-between the buyer and seller, someone who can give advice – sometimes someone they can vent their frustration on rather than the opposite side. We learn to have broad shoulders and strive to keep both sides on a friendly footing.
As a seller, are you prepared to run errands to get documents where they need to be? Will you call both attorneys regularly to check on how things are progressing? Of course not; the other side’s attorney will not speak with you – but he will speak with agents. You would be surprised to learn how much of my time is spent in the office, advertising, making phone calls, gathering information for folks, and keeping abreast of developments on the deals we are shepherding. It’’s far more than half.
Will you be there to let in inspectors and appraisers and stay with them to answer questions while they do their work? Do you have experience in dealing with inspection or appraisal failures? How to take corrective action? Do you even know who to recommend for these jobs? Or who to steer folks away from? Will they respond as fast for you as they will for an agent?
Do you know how to write contracts? And do you know everything that should be thought of? Agents do. If you don’t know and don’t have an agent to do it for you, you will end up paying a lawyer additional to do this. If you need guidance through the process, the agent does that for free. Lawyers charge.
At the closing, it can be very useful to have a third party there who was present throughout the deal, one who took notes, remembered details and can clear up differences of memory and opinion between the two sides. In every black and white contract there are gray areas that lie hidden. Sometimes he is the only one who can see through them if they surface.
At the end of the day, if a full-time agent Is good, he earns a living. Most I meet are very far from rich. Out here, if we are good at what we do and are full-time, we garner a middle class living. Co-brokes, extensive travel costs, advertising, and office expenses eat heavily into those “big” commissions. If an agent can’t earn a living after paying these things, he goes out of business and then no future buyers or sellers are helped.
Some are merely amusing, some can be an immense help. All are interesting.
After 40 years, I've learned a lot, & acquired unforgettable experiences. Follow these long enough and you'll eventually get the whole book. (Names probably changed, for obvious reasons.)