A long time client of ours recently gave us a newspaper article found in the Wall Street Journal. The article talked about the value of an experienced real estate agent in comparison to someone who is considered a “rookie.” Knowing that real estate brokers are a dime a dozen, he felt it would be something valuable to have in our arsenal when competing for listings. It was a great read which examined more than 10,000 listings. They discovered that a seasoned broker, on average, fetches approximately 12.4% more for the property owners they represent than agents with less than two years experience. It went on to say that experienced brokers also sell homes 32% more quickly than a newbie broker and veteran agents are 1.6 times more likely to successfully sell a listed property. If you’re thinking the reason these figures favor the veteran is because they are pricing the homes at reduced prices, it appears that is not the case. The one area where there was no difference between the two levels of experience was the listing price. How interesting.
As our market starts to improve, it brings us back to the time when everybody and their mother decided to get their real estate license. Many saw the great income potential in our business and figured “How hard can it be?”
Since our commission is discussed 8 out of 10 times when taking a new listing, we found this article to be particularly powerful in explaining that in our industry, you truly get what you pay for. Sure, it goes without saying that we were all new at one point and in order to build our businesses we often had to make sacrifices we otherwise wouldn’t have had to.
Selling real estate is a bonafide profession. Many of us aren’t just dabbling in it, we are committed to working full time and we take great pride in not only creating an enjoyable experience for our clients but also having successful outcomes. I would venture to say that Dyan and I do things a little differently than most but we do them because they work and let’s face it, we are a little different ourselves. We enjoy the challenges of a market environment where there are literally a thousand other brokers to choose from. We think the service we provide is of real value. We also like to think our business is driven by common sense more so than by the bottom line.
There is so much that goes into a real estate transaction and extends far beyond that actual transaction at hand. The importance of relationships is invaluable and plays an immeasurable role in each transaction. Whether it’s with inspectors, appraisers, fellow agents and the like. It really is not something you can create in a short period of time nor should it be disregarded as unimportant. Networking among other top notch professionals is integral to the success of our industry. We brainstorm together, we market to and sometimes with each other, and we really are an invested group of individuals who spend countless hours for the benefit of our clients; past, present and future. Please don’t misunderstand, we have come to appreciate when we encounter a seller who wants to strategize on the best, most cost effective approach for marketing their property while also realizing the value we bring to the table and we welcome that discussion. We like to work together with our clients not FOR them.
We are the first to suggest that any seller who is considering listing their home should talk to a handful of brokers. We are all very different and after all, our service is really what we have to offer. It’s what sets each agent apart from the next. Hell, a trained monkey can open a door and let someone inside, right? But it’s an experienced agent that can price the home appropriately, guide you on market trends and how to best position your property, target the appropriate audience to get maximum exposure to your property, overcome the challenges when an offer comes in, inspection repairs are being negotiated or an appraisal doesn’t make value. We get homes closed and we do it consistently.
The bottom line is all sellers, buyers and REALTORS have the same goals when it comes to real estate which is to put the deal together. Yes, we sometimes get lucky and a property sells quickly and the escrow goes smoothly but don’t dismiss the tremendous amount of behind the scenes work that played a role in the successful outcome. Without countless hours invested in knowing the market, the home wouldn’t have been positioned properly in the first place and would become stale over time. As days on market increase, statistics will show that the selling price will decrease so why not price it exactly where it should be from day one, get a close-to full price offer, if not full price and be done with it. After all, you are listing your property to sell it and not just to go through the daily routine of preparing it for showings, right?
On the topic of real estate commissions, every office determines their fee structure based on their level of services, marketing, and costs of operation. There is no standard fee in real estate as we are all empowered to charge a fee that we feel is fair for our services. The one area that is sometimes not discussed is what is being offered to the broker who is representing the buyer. Truth be told there have been times when we have increased our commission rate not because we wanted to charge more for our services but because we wanted to offer more to these buyer brokers. We implemented this “strategy” when our inventory levels soared and agents had hundreds of properties to choose from. No matter how long their list of properties, we wanted our sellers’ properties on the top of that list and offering a fee that represented the value that broker brought to the transaction was a key part. We understand the value of an agent, how hard they work for their money and how often times agents have to work with clients for six months or longer trying to find them a house.
We have had clients of our own look at property for 2.5 years before finding the perfect place and the record setters were looking for more than four years. Sure, it was off and on until they relocated but they were looking for market updates on a monthly basis during that time, evaluating the inventory, asking questions, etc. And since they didn’t live here, they always came to visit on long weekends; over holidays….you know the drill. We haven’t even touched upon the scores of “buyers” who never buy anything because their job transfer never came to fruition, their home didn’t sell or their relationship fell apart. At times we have found that extending that little extra incentive to the buyer’s agent has worked wonders. They feel vindicated and perhaps even a little appreciated and more often then not, they are the first to step up if we run into a wrinkle and need some concession to keep the deal together.
Real estate is not for the faint of heart; we have said it before. It is every bit as hard as running your own business because after all, that’s exactly what it is. Our days don’t end at 5pm and our weekends aren’t for relaxing by the pool. We need to be available when our clients are available and that’s typically outside the business hours of a conventional work day/week. What agents bring to your sale is valuable and we hope over time their roles will be held in high esteem like the other trusted professionals in your lives. When choosing your broker we encourage you to do your homework. This is a relationship you will have for years to come and through your listing or home searching process you and your agent will share in some very raw moments. There is a lot of emotional and financial stress within a real estate transaction so finding someone who has your back is essential.
So, as you prepare to buy or sell your next place don’t forget the old adage, “You Get What You Pay For.”
