Q: A fixed price real estate listing company is an advertiser on your radio show. I accept advertising for what it is.
However, I do respect your opinion and really wonder if you would choose that company to market your home. My experience, after selling several homes, is that the listing agent really does not do much. Typically, they work very hard to get the listing with marketing and selling techniques on me, but then go seem to forget about me while they search for the next listing.
The selling agents on the street and now the web seem to bring in 99 percent of the lookers and buyers. Therefore, it seems that the lowest price-listing agent is the way to go. Of course, I say that with tongue in cheek since there are some other considerations too. However, at the end of the day, a fixed price real estate company would appear, at least on the basis of that company’s program, to offer the best value solution.
We live outside of Atlanta in a neighborhood of 300 homes that sells well, and there seems to be a stigma with certain fixed priced listing brokers. I have only seen one sign in years from companies like that. Maybe the other local agents are doing a better job of getting listings in the area. What is your bottom line opinion, please?
A: I think that sometimes a discount agent or fixed price real estate agent can work just fine. I’m also a big believer in selling your home yourself, by owner in some circumstances. And, frequently I like full-service agents.
The short answer to your query is that the type of agent you choose has a lot to do with the state of your local housing market and determining the kind of seller you might be. Are you a pie in the sky seller, where you’re willing to try a high price point just to see what happens? Are you desperate and anxious to sell, so you’ll price your home extremely competitively? Or, are you a realist, where the price point depends on what’s actually going on in the market?
In general, I really like the idea of a discount broker. There are so many real estate agents, and many of them are good. But in some ways, the practice of real estate brokerage has become commoditized. You can get certain services for less money. As a consumer, I always want to pay less if it doesn’t mean I have to take a hit on the services I receive.
If you want to pay the least amount, you would choose “for sale by owner,” where you do all of the work of the agent or broker and the seller. For many sellers, that’s simply too much because the sale of a home is such a stressful and emotional event already.
At the other end of the spectrum is a full-service broker, who will do everything for the sale but will charge you 5 to 7 percent of the sales price. Many full service brokerage firms will not only list your home on the multiple listing service in your area, but will advertise your home in weekly or monthly brochures distributed in newspapers or by mail. They will also obtain professional photographers to take still images of your home and may add other virtual tours of your home. Some real estate agents will actually attend each and every showing and make sure that the potential buyers and selling agents see the best qualities your home has to offer and make sure the showing is as good as it can be.
Discount brokers fit somewhere in between, where you do more of the work but pay less money overall. There are different types of discount brokerage models, and the most successful brokers can be threatening to full-service real estate brokers, who worry about the increasing commoditization of the business and how they’ll remain competitive overall.
To answer your specific question, we don’t know how well a fixed price or discount real estate agent will do in your specific neighborhood. After all, we don’t live there. Though some discount brokers have sold thousands of homes and have become quite successful, they may not be the right choice for you or your neighborhood.
There are real estate markets in which traditional full service agents have a negative view of the discount real estate agent model. We have seen situations like yours where traditional agents won’t show certain companies listings or for sale by owner listings unless they absolutely have to. If you live in a desirable neighborhood, it’s harder for agents to avoid showing your home. If you live in a neighborhood with lots of homes offered for sale, you may find quite a bit of competition for showings and might have an uphill battle to market your home.
For these reasons, your decision to use a particular real estate agent can be complicated. But you can also keep in mind that in some markets, we’ve seen agents that work in a particular neighborhood avoid showing homes in that neighborhood when those listings are with full service real estate companies that are not considered the usual companies that work the neighborhood.
Our best suggestion is to interview a number of different brokerage firms, preferably the ones who do the most business in your neighborhood. Ask them to do a comparative marketing analysis on your property and see what the suggested listing prices are. You’ll have to square their suggestions with what your gut tells you about the local housing market and then see which agent delivers the most bang for your buck.