We occasionally get this question asked: How many of your listings do you sell? Answer: All properties, IF sellers allow us to sell their property. You see, sellers control the price of the home on the market. Most sellers are in tune with the current market and listen to our advice on initial pricing, presentation, feedback and any price adjustment that may be necessary. With our expertise and the massive exposure we offer (see 30 points of marketing), all bases are covered. Nevertheless, a small minority of sellers defy the market's call and refuse to make any adjustment to the price or presentation of the home.
This small number of sellers who refuse to face reality sometimes migrate to a high commission agency under the perception that by paying much more in commission a buyer will come along and pay "their price". Reality though is, that buyers DO NOT care how much commission one pays. One can see this by the previous post that sellers find this out the hard way, wasting many more months on the market, then reducing (sometimes multiple times) and paying a high commission at the end. Not a smart move by any means.
In previous years sellers could ask more than the market because as prices rose those sellers would eventually get "their price". Nowadays though the market is stagnant, if a seller wants a higher price than the market analysis by one of our expert agents suggests, or showings and feedback from buyers indicates too high of a price, the property sits. All real estate companies face the same problem with sellers in denial (see article Milwaukee Journal Home section of 3/15/09 ).
With our very low commission structure, sellers have a clear advantage over sellers with a high commission broker because they can afford to lower the price if they want to sell. For an average metro-Milwaukee home of $209,000 the savings between a 6% and our 1.5% commission amounts to $9,400. So if a buyer is looking at two identical properties one at $209,000 the other at $199,600 you know which one is going to get more showings and eventually an Offer. Of course there is rarely identical properties due to so many variables (location, condition, decorating, etc). This is the area where our expertise comes into play. Given the exposure and expertise we offer, there is no way a property cannot sell under our program. Hence the statement above.
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this is true for other companies, no?
ReplyDeleteNot necessarily and here's why:
ReplyDeleteA. We do offer the most exposure on can get.
B. We really know real estate and how to sell. Our agents are very seasoned and do much more business than the average agent. As a result we know how to best stage the home, price it, negotiate the Offer and any subsequent issues with inspection, appraisal, etc. It's incredible how much inexperience we run into with agents of other offices primarily because on average, they do so few transactions.
C. A high commission can be an obstacle when one is listed with a 6% company. $13,000 for the average home prevents a seller from accepting an offer that is less than planned. A seller has definitely more flexibility with Homeowners, thus a better chance of selling.