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Other Resources
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The Pitfalls of Limited Service Real Estate Limited Service Real Estate companies are popping up everywhere. Promises of significantly reduced commissions are enticing, however there are significant drawbacks that they probably don't tell you about.. Most likely these drawbacks will result in a lower net selling price on your home, more than the money you saved on commissions. Translation, you loose money! For example, assume our hypothetical listing agreement saved you $5000 in listing agent fees over the nearest competitor. Your final selling price was $10,000 less than what it would have been with a full service agent.. You just lost $5000 when you thought you would save $5000! Why does this happen? It is important to understand some key points about Real Estate Sales First, most homes are sold by agents. Buyers typically hire an agent to help them find that perfect home. While there are lots of internet search pages, open houses to go to, and other buyer directed Real Estate Search processes, eventually most buyers hire an agent to help them. Knowledge of the contracts, knowledge of homes, advanced search capabilities and the fact that hiring an agent does not cost the buyer anything are a few of the reasons that most buyers use an agent to help them find a home. Second, certain factors will discourage an agent from showing and
selling a particular property. For sellers lower exposure = lower price.
These include Why? Reduced Selling Office Commission reduces the selling agents paycheck. He or she may be hesitant to sell a property that will result in a lower paycheck after many weeks of work. Some Limited Service Listings require the selling agent to work directly with the seller to negotiate the contract. This can be precipitous for the selling agent. Agency laws describe strict rules regarding relationships between agent and client. When an agent who represents a buyer sits with the seller, he is exposing himself to significant legal risk. The wrong statements or actions can imply that the agent is working for the seller. As the negotiation occurs, the selling agent can easily find himself in violation of agency laws. The potential legal risks can have significant financial implications to the selling agent. Lawsuits, license suspensions/ revocations, and association penalties are all real and present risks to the agent. Experienced agents will shy away from these listings! When sellers must negotiate their own contract, they will get less traffic, less exposure to buyers and a lower selling price. I recently did a quick survey of Seattle Listings from a Limited Practice company. Most properties were on the market for more than 100 days, and many for nearly 1 year. My market time for most listings is 30 days or less! Third, Selling a home requires experience. People who try to show and sell their home themselves frequently make mistakes that discourage potential home buyers. A Real Estate Professional knows how to avoid those mistakes and get you the best price possible. I coach my clients as to what they should and should not do when an agent calls to show their home. So what makes my service different? I am a full service agent. You will not be asked to hold your house open, to show the home to prospective buyers or to negotiate a contract with a selling agent I will provide you with specific instructions to cover each of these potential risky scenarios. Most importantly, you call me with any and all questions and refer buyers and or their agents to me. Maintaining an 'arms length' transaction is an important aspect of a successful Real Estate Sale. Any and all questions regarding the property are always referred to the listing agent as the third party. Limited service practitioners do not honor the concept of an 'arms length transaction' by the very nature of their service. What do I provide that the limited Practice Agent does not ordinarily provide? * A proactive marketing campaign To maximize your selling price and save money, Call me today at (206) 412-0466. |
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