Flat Fee vs. Commission Based
Reasonable sellers who understand the process of listing and selling a
home know what they need out of a real estate agent. If you talk to some
real estate agents about "discount brokers" (as they
no-so-lovingly refer to our Flat Fee service package) you will hear a lot of negativity usually. The
opposite is true also - Flat Fee brokerages will talk negatively about
Commission Based brokerages typically. The funny thing about it
is...neither side is wrong...they both typically lose sight of the
fact that each service is needed in order to fill the needs of all
sellers. Ultimately it is up to you as to what you need in a real estate
agent. That is exactly why we have created a true full service stop for
people to get their home SOLD whether it be they need a Commission Based
situation or they need a Flat Fee service. Both of which are equally
effective and we provide the same representation on both levels.
The fact of the matter is, there are a few things (if anything) that a Commission
Based real estate agent can provide to their sellers better than on the
Flat Fee side. The Commission Based program offers a bit more "fluff"
and ambiguous in what they offer with marketing and communication. Whereas a Flat Fee program is
typically a bit more streamlined and defined due its volume business model. Again,
neither is necessarily "better" and is completely dependant on the
sellers personal needs.
- The single most important factor that generates showings and
offers is the price. If you are participating in our Commission
Based program, you have the opportunity to price
the property higher to cover the slightly additional expense. By listing on the Flat Fee
program, the listing
price can be set lower based on the listing savings. Another benefit
with our program is that when a buyer contacts us about your home, we refer that buyer
directly to you. We do this on both programs. This allows you to save another 3% when no buyer agents are
involved. You would not be
able to do this with the typical Commission agent with another
brokerage. With their programs, even if you sold your home to your sister, you still must pay
the full commission. Not with us!
- The great thing about our company and
how we have designed our services is that when a buyer contacts our office
after seeing a yard sign or on the internet, we do not treat the
lead as simply a potential buyer...we treat them as a potential buyer for
YOUR home. With the typical real estate office that
lead is treated as a potential buyer for any house with no huge
motivation to really try and keep them only interested in your home in
particular. The agent answering the phone makes
the same commission if he sells any listing. Hence, the focus is not your home, the
focus is on turning the caller into a buyer-client. The agent may answer a few basic
questions about your property, and then move on to questions such as, "How soon are you needing to find something?";
"What is your price range?"; ; "Do you also have a home to sell?"; etc.
The goal being not necessarily to sell YOUR home, but
to sell A home.
This is why many people have their home listed with a typical commission real estate
agent with one of the other brokerages go without any
activity. When they finally decided to list with us and can then drop the price
because of the savings we offer,
they get showings and offers right away. It's always funny to us that
most Sellers never try calling the phone number on their agent's yard sign
pretending to be a buyer as a test to see how the call is handled. Do
they truly try to sell YOUR home. We suggest that you should try it to see how it's handled.
When a buyer calls from our yard sign we direct the calls to you, so you will never miss a buyer's call.
All of the above said, this is where at the beginning when we said that
an educated seller knows what they need out of an agent. Some people do
NOT want buyers calling them. They want the agent handling it all. The
great thing with our Commission Based program is that this is still
possible. It depends on what you need as a Seller and what best fits
your personality.
Sellers are more educated today
Sellers are getting more real estate educated and savvy today. Experienced and educated sellers realize that
there are options for them - options that are innovative and more
productive in getting homes SOLD such as our creative service plans.
There are some very creative Sales Myths
out there designed to convince sellers to list with the traditional
brokerages that offer one service type, the traditional commission based
agent. Here are the some of the most common Sales Myths that have been
created to try and convince a seller they should list with them instead of
an innovative brokerage like us:
Sales Myth: Our company has a well-respected name in the business,
so buyers feel more comfortable with us.
Truth: Buyers don't care about the company who has the listing;
they care about the property and if it fits their wants and needs. The buyer is not buying a car,
whereas a BMW 740
is better than a Toyota Corolla. Branding of a real estate firm has nothing to do
with your property.
Sales Myth: If I have your listing, I'll "market" your home.
Truth: Most real estate agents seem to like vague and non-committal words like "market".
If you ever hear this, ask, "What specifically would you do?" Don't let them off the hook when
they give you more vague answers. Probe further and insist on quantifiable specifics! such as
how many Open Houses, Agent Caravans, Professional Photography,
real estate agent.com showcase, Listing syndication, Performance Reporting, Flyers, Videos, Virtual Tours, etc. The more specific
the better for you. Most of these services we included in our flat fee, or at very low cost. Many
times we see listings with only a few poor
quality pictures taken by inexperienced agents and a low quality digital camera.
They put it on the MLS and call themselves a full service
real estate agent. If you ever going to do a 6% listing,
insist on 90 day listing with bi-monthly open houses, extend only when the agent hosts open houses
are scheduled.
Sales Myth: If you list with one of those discount outfits,
you are going to get "blackballed" and no agent is going to show your house.
Truth: First of all, if you follow our advice and use our
real estate company sign and follow the standard showing
procedure for your area, real estate agents would not know that your listing is different from any other listing. Second, even if they could somehow tell the difference, it really wouldn't matter anyway. Buyer's agents are
independent contractors.
They do not have any obligation to their broker or other big monopoly listing agents. All buyers' agents care about is getting
their commission, and they WILL show your house since they are getting exactly the same commission with our listing as any other listing.
The only agents complaining and making up "blackballing" stories are the local
listing agents who can't get 6% listings
as easily any more,
and they don't normally work with buyers. They rely on buyer's agent
to sell the homes almost 99% of the time. They quickly put a "SOLD" sign up as if the listing was sold by them.
Sales Myth: We have tons of buyers referred to us from our company relocation
business. It seems like that the odds of finding a buyer are better if they list your house.
Truth: Any buyer agent gets the same commission no matter where the buyers come from. Sometimes a relocation
referral costs a buyer agent 25% to 35% of their share of the commission. It actually hurts the agents if the buyer are referred
by their company referrals. Even if they list your home, there is still no incentive for their office agents to sell the
your house over any other house on MLS. A good question to ask an agent who gives you this
myth is, "Bring your buyer over, you will get paid whether you have the
listing or not."
Sales Myth: We'll enter your listing in a sales book which is distributed
to hundreds of supermarkets all over the area.
Truth: This is a favorite Sales Myth of some bigger agencies. If
you've ever seen one of their books, you'd know it contains little useful information
and is designed to promote their office and their agents. Usually there is no
home address or detail.
Typically there's a small property photo, and a one line description like "Big yard
– bring the kids & pets". Even if it had some useful information about your home, the time
lag between printing and distribution (greater than 6 weeks) makes it useless. Many of the books come out quarterly,
the information may already be 4 1/2 months old when it's picked up. Do you notice that each page always has a big
beautiful photo of the agent. The goal is to promote the agents and office, it's not for promoting your home.
Sales Myth: I'll send an email to every real estate
agent in the MLS so
they are aware of your house.
Truth: Active agents subscribe to the MLS and send buyer new home alerts automatically.
Email new listings to all agents simply annoy other real estate agents, and make them dislike the
spamming agent. No legitimate agent reads this spam. If agents have buyers looking
for a particular type of property, they search MLS, not their spam emails.
Sales Myth: I network with other real estate agents, therefore I'll get the word
out there about your house.
Truth: Absolutely ridiculous. Agents who are busy working with
buyers don't have time for tea parties or bowling tournaments or other functions
to rub elbows with other agents. Real estate agents who have time for tea parties are typically
new and inexperienced and don't have anything better to do than "networking" with
other agents. Agents working with live buyers use the MLS to search
for homes, not trying to find homes from some agent at a bowling alley.
Sales Myth: We'll hold an open house and send mailers out to
the whole neighborhood.
Truth: Although open houses are important to get buyers into the door to see your home,
it's also real estate agent's chance to meet prospective buyers. Most of the time
real estate agents are doing the open house to give you
the impression that they are actively marketing the home when they are actually
just promoting their own business. We believe that as sellers you can hold open houses just as effective as any
real estate agent, and
if you get a buyer yourself, you can save the full 6% commission!
Have you heard any interesting Sales Myths lately? If so, please Email
info@firstteamgeorgiarealty.com
to us so we can add them here!