Northern New York Realty Home Selling Tips Article #5, 1/10

In this article, I'd like to reveal some unknown secrets about the ways that Real Estate Agencies conduct their business and why it may not be in your best interest to list your property with a real estate broker.

Please note that it is not my intention to degrade any real estate agency/person, as I've personally known and respected several highly ethical real estate professionals. Rather, having been a real estate broker myself, I'd simply like to shed some light on how they work and why they may not work well in marketing/selling your property.

1. It's all about the money. Real estate persons are paid commissions for the properties that they sell. Generally, the commission split on any sale is 50% for the listing Agency and an additional 50% split between the listing broker/salesperson and the broker/salesperson that actually made the sale. Additionally, there is a further commission split when a property is sold through an outside Realtor.

Consequently, real estate persons are motivated to show and sell only their own in house and personally listed properties.

2. Real estate agencies generally advertise the property listings, that in their view will make their phone ring in order to attract prospective buyers and generate in house property sales. Furthermore, they really don't care if your property sells; as long as they sell something and keep the cash flow/commissions coming in.

Consequently, if a Realtor advertises your property in their Multiple Listing Service (MLS) and/or local newspapers etc., any prospective buyers that respond to your ad, may/usually end up purchasing someone else's property. This is a "Hit or Miss" proposition and what I refer to as "Indirect Property Marketing".

3. The Realtor Multiple Listing Service is not as an effective property marketing tool as Real Estate Brokers/Sales Persons may claim. Let's say, as an example, that you own a 3 bedroom home with a single bathroom on 1.5 acres of land, but you also have another room that could be used as either a forth bedroom or an office. A prospective buyer looking specifically for a 4 bedroom home with 2 bathrooms on 2 acres may never see your MLS listing.

Consequently, your home may not come up in the prospective buyers selected MLS search criteria and may not be considered. Furthermore, don't let a Realtor/Broker/sales person just throw up their sign and wait to see what happens!

 

4. No one knows your property better than you do; so why would you trust anyone with a limited knowledge about your property and with a personal financial agenda to represent/market your property? A common answer is that some property owners believe that they will sell their property quicker with the help of a real estate professional and that they don't have the time and/or the skills/contacts to do it themselves.

The reality of this situation is that aside from showing the property to a prospective buyer, your Real Estate Attorney does most of the work involved in the preparation of legal documents and the ultimate transfer of property ownership.; so why give away a large percentage of your profits to a real estate broker/salesperson?

Having said the above, it's important to note that sellers can get the best of both property marketing systems by having a comprehensive online "For Sale by Owner" listing with nnyRealty.com while giving interested brokers an "Open Listing" at a negotiated/reduced brokerage/commission fee (3 to 4%) vice (5 to 10%).

Many Real Estate Brokers may strongly resist taking your property on an "Open Listing" basis due to their stated policies and advertising costs etc. Most Real Estate Agencies actually spend very little in the advertising of your specific property and more on their name recognition.

Their primary motivation for insisting upon an "Exclusive Listing" is to tie up your property in order to protect and maximize their real estate commissions!

Most Real Estate Agencies concentrate on selling their own internal exclusive listings in order to capture a full commission; but if and when their exclusive listing is sold through/by an outside Agency, they still get a good piece of the pie.

In my opinion as a former Real Estate Broker; aside from their hype, an exclusive listing is in the best interest of the broker and not the property owner.

Get your own Real Estate Forms, get a good Real Estate Attorney and keep the money in your own pocket where it belongs.

I totally welcome anyone's thoughts and/or comments regarding this article. Please send your thoughts and comments to: fsbo@nnyrealty.com.