Chevy or Cadillac? Toyota or Lexus? Why pay more for your REALTOR?
Have you been shopping for a new car or bought a new car recently? Well if so you know that once you get to the point of shopping online you can see that you have options and various price points. Once you decide how big the car needs to be for your family and lifestyle and what size engine you desire, there are still a lot of options and the price range can still fluctuate or even double.
Take for example a Toyota SUV that you could buy used for $10,000 to $15,000 and compare that to a brand new top of the line Lexus SUV that can start at over $80,000. They both are a means of transportation, meaning they both have 4 wheels, a motor to power the car, and a steering wheel to allow you to have control of the machine. But if you have ever driven a high-end luxury car you clearly know the differences and the reason for the increase in what is charged for these benefits. If you recall the first ever Lexus commercial it was of a car with a ball bearing rolling smoothly in the seams of the car to show the quality engineering put into the Lexus Brand.
Now compare this to selecting a REALTOR to sell your Franklin home. If you are looking specifically just for the cheapest solution, think of what you could be missing?
An agent that cannot negotiate with you for a fair and reasonable commission and opts for a flat or reduced fee to attract business is going to be at the helm of your real estate negotiation (or else you will be taxed with that yourself). Is that going to get you your best return for your money? You are emotionally involved and may let that cloud your judgement and a reduced fee agent may not have experience at negotiating or even worse they are not incentivized to get you a better deal.
Discount brokers need to list more properties to make a living, thus you will not get a superior experience and attention to the details of your needs during the transition as they will be taxed with more clients.
The full service REALTOR’s job isn’t completed when the buyer and seller are introduced and the contract is ratified. It is just entering a new phase. It shifts from the Marketing Department to the Logistics Department. If a flat fee was paid to just market a home on the MLS are they planning to offer this transaction coordination and advice on negotiations and decisions that still need to be made.
Marketing costs money, and as an expert in marketing myself and properties that I am selected to advertise and sell, I have access to many advertising avenues. High Quality Marketing – when dollars are reduced to the listing agent, they cut costs on things that actually help get the most attention on a property like professional photography, virtual tours, video creation, etc. It is easy to understand that to get the most for you house you need to get the most eyeballs looking at the property in a positive light. Is reducing the amount you pay your REALTOR going to allow them to have dollars to make great marketing decisions.
An example of high quality marketing is shown below.
Offering someone less to do a job doesn’t motivate them to do the best job. Part of a great marketing plan involves marketing to the buyers and to their agents. The buyer’s agent is compensated out of the listing agents commission so their inability to negotiate to get a substantial commission means they may have to offer the buyer’s agent less than the median commission in your market. That means that the agent could show their buyers all the comparable homes to yours and they could earn more for doing so and avoiding showing your property. Many buyer’s agents will have an agreement with the buyer stating that they expect to earn a set commission and if your listing agent is not offering enough to cover that fee then it passes along to the buyer and many buyers cannot afford to pay that as it cannot be financed so it would be cash above the purchase price. All of these things could be working against you without your knowledge.
All commissions are negotiable between the seller and the agent, but don’t think of an increase in my commission as a direct cost to your bottom line as I will put in place superior marketing and service that excels. On average I sell homes for a greater share of the original list price. Based on my median sales price that saves my typical seller $5760, which is about 1.6% of my median list price. So when an agent says they will drop their commission or they will do it for a flat fee, ask yourself what are they not going to do and can they get you the most for your house. The commission is not saved, if the house doesn’t sell or it sells for LESS! So every dollar saved is not always put into your pocket.
When you drop your car off to get serviced, does a concierge meet you with a coffee and great you by name and offer you a comfortable place to wait while your car issues are diagnosed and repaired? If you drive a Toyota of course not, but that is the level of service they strive for at Lexus dealerships.
So when you decide to sell, interview agents and ask them what they do to market your property and what systems they have to conclude the business of the transaction and ask yourself what kind of experience you want to have. Are you looking for a Toyota Experience or do you want to have a Lexus experience.
Thinking of selling? Review these 7 Things to Know and Do before listing it for sale.
The Grumbles Team is Your Relocation Engineer in Franklin, Tennessee 615-587-5843.
EXIT Realty of the South | 1227 Lakeview Dr. Suite 1 | Franklin | TN | 37067 | 615.550.5555 Each EXIT Office Independently Owned and Operated