Some agents will say just about anything to get your business.
The Things Some Real Estate Agents Say… Some agents will say and promise just about anything to get your business. Below you’ll find a list of gimmicks, promises and tactics that should be avoided when interviewing real estate agents.
Look closely – you’ll often see that individuals giving the ratings are in fact associated with the brokerage or agent. How can you tell? Take a random sampling of individuals leaving feedback and visit the Ottawa Real Estate Boards Member Lookup page. You’ll see in many cases 5 star feedback is left by licensed real estate either associated or friends with agents in order to game the feedback systems.
Some real estate agents offer clients the use of a moving van when using their services when buying or selling. On the surface this doesn’t seem like a bad deal, but translated, it literally means ‘pay me five to six percent commission to use my real estate services, and I’ll let you move yourself using a cube van I lease, plastered with ads promoting my real estate services that you could rent at Hertz for less than $75/day’.
You could effectively pay a professional moving company to do with heavy lifting with the savings associated with a service like ours.
This is true. Many real estate agents elect to work for brokerages that take up to 50% of the commission earned per transaction. However alternatives exist that allow these same agents to work for lower-cost brokerages, allowing them to generate the same level of service while passing along some of these savings to the consumer.
There is only one party who controls how long a property takes to sell, and here’s a hint – it isn’t the real estate agent. It is the seller who effectively determines how quickly a property will sell based almost exclusively on the listing price. While we all know that homes that show well in desirable neighbourhoods sell fast, it’s finding the sweet spot between getting fair market value while limiting the time a property spends on the market that is part art, part science. And the seller controls it all.
We have homes routinely sell for full asking price when sellers have a realistic sense of what their property is worth. Sellers who overprice their home end up with properties that languish on the market, and ultimately sell for less.
Says who, your real estate brokerage?
Awards are always given to pad a REALTORS® credentials, and are always given by the brokerage that employs them. Worse, these awards are always based on sales numbers, not client satisfaction. So when you see a awards appearing on the business card or website of a REALTOR® you are interviewing, keep in mind that these ‘diamond’ and ‘platinum’ awards were given to the agent by their employer, not a third party measuring overall satisfaction.
90% gimmick, 10% insurance – and a really good REALTOR® hook to get into your home. But don’t expect anything close to market value if you buy into this. Firstly, there are very few homes that even qualify for this gimmick. Typically anything over $300,000, or anything serviced by well and septic wouldn’t even be considered. It works by having you agree to sell your home to the listing brokerage at a price significantly under market value in the event it doesn’t sell at a higher commission rate (typically 6 – 7%). Conditions in the agreement usually dictate price reductions at set intervals. But wait – you still have to pay the commission! Here’s the math:
|List price (market value):||$300,000|
|1st reduction (after month 1):||$290,000|
|2nd reduction (after month 2):||$280,000|
|Agent cash offer price:||$270,000|
|Minus commissions:||– $18,900 (7%)|
|HST on commission:||– $2,457|
It’s also worth noting that in most cases, the program only applies in the event you purchase something directly from the listing agents inventory. When this happens, the listing agent makes both sides of the commission, and affectively makes twice the amount of money.
This is actually the same gimmick as the cash offer above, only in reverse. They’ll buy your home back only after having agreed to a price under market value, only after having listed it on the market for a period of time dictated by the brokerage, and only after having to make price reductions at established intervals. You won’t win.
Under pricing real estate will always generate buzz, leading to multiple offers. This is a common strategy, especially in a hot sellers market. List a home valued at $300,000 for $275,000 and you are likely to get multiple offers resulting in a sale price above the asking price. Suggesting salesmanship resulted in a sale over the asking price in this situation is misleading, since a sale price above asking would have been achieved regardless of your choice of agent.
Equity One once listed a property we knew would be in tremendous demand as a result of favorable zoning for a developer. Our strategy was to list the property on a Wednesday, host an open house on a Sunday, and accept offers the following Monday at 6:00pm. The result? The property received no fewer than 9 offers and sold for $172,555 over the original asking price to a real estate developer. While we take credit for implementing a strategy to build up demand for the property, the market was ultimately responsible for driving up the selling price.
Using the team to get your business does two things: First, it builds value in the service by suggesting that you won’t be limited to having one agent looking after you, you’ll have 5. Second, it helps the REALTOR justify the commission they are trying to get you to pay, since it is obviously expensive to employ a team of experts. Don’t buy into this hook. The agent you want managing your listing should be the same agent who advised you on pricing, presentation and comparable sales. “REALTORS® don’t show homes listed with discount brokerages or low fee MLS® services.”
Statistics suggest otherwise. In fact, more than 80% of our listings are sold when another agent represents the purchaser. But some agents use this as a scare tactic to dissuade sellers from taking a discounted approach to selling. ‘Keep people scared, and you’ll keep people consuming’, or so the saying goes. Truthfully however, agents with buyers will always call to view your property if we do two simple things: Establish a listing price that is realistic and inline with what the market will bear, and advertise a competitive commission for the buying agent. Do these two things, and we guarantee that agents with buyers will show your home.
Consider this. In 2011 we operated listing plans that saw us perform the same services as most full service agents, only we charged a small flat fee. We helped people establish a fair asking price, helped them stage, took outstanding photos, explained everything that they needed to be successful using our model. The result? Our success rate at selling homes was on par with the top agents having listed over 100 units that year. The average price reduction accepted by our clients was less than the top full service agents, with a significant difference. None of our clients ended up paying a listing commission, resulting in commission savings of at least 2.5% over traditional realty. With this, we’ve proven 2 things – that there is inherent value in using a knowledgeable real estate brokerage like ours, and that successfully selling a property isn’t dictated by the listing commission you’ve agreed to pay your REALTOR®.