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The Seven Secrets Your Real Estate Agent Doesn't Want You To Know

1. Listings Control the Marketplace

If you didn't get it from my listing letter. I'll say it here. The MLS is the most powerful marketing technique that will sell your home. End of Story.

A corollary to item  # 1 is, if Listings rule the marketplace, then the more listings under a brokers control, the more market share the broker will have.

In fact the pros actually figure their ratios out. If a broker has 100 listings over a certain time period. And 70% of the listings are selling. Then in order to sell 100 listings  I need 143 listings under contract in order to make it to sell 100.

This is a much easier way to control your income as a real estate agent.

Because you can look at the marketplace as an indicator of  how many listings sell, you can get an indication of what the market will bear for your home.

2. If your home is not priced right it will not sell.

If your home is in a receding market you had better price your home very well for the market. 

In a rising market, your price still determines if you will get interested buyers. But many people want to get as much as possible out of their home and rightly so.

Just remember. Your next home could be rising faster than the home your are selling. So be careful trying read the tea leaves.

Be careful of CMA's (computerized marketing analyses). They aren't usually very analytical and many times a broker is willing to list your home at your price. They want the inventory and want the ability to ask you later to lower the price.

Read My Guerilla FSBO tactics for a great technique to price your home attractively but still outsell the market.

 
3. Your Open House as the LEAD GENERATION PLANT!

Usually nosey neighbors, people just starting in the buying process, and owners looking to price their home, go to open houses.

All of these people are leads to a real estate agent. Very few are going to buy a home, let alone yours.

4. Ads bring brokers leads

Ever see the movie American Beauty?

Remember the Big Shot Real Estate agent. He called himself the "King" of the area.

Why is it that real estate companies or agents feel they need to be sooo gaudy? The King or Queen. Well we have been taught that is how to get a Brand awareness of ourselves.

 Listen, I have paid big bucks to go to seminars that taught me to publicize myself in a number of ways. Like big ads showing me off as the King of the local area. Big mail campaigns and even publicity stunts that would have me renting out an entire movie theater for people in my area-my farm as the industry calls it.

I would get all my farm into the theater and play a commercial trailer about me and my services and then get up in front of everyone and give a speech!

And people wonder why agents charge so much!

Thankfully,  I was wise enough not to buy into that garbage. 

I aligned myself with several of the top agents across the Western US and meet regularly. I found none of these professionals run big display ads. They would rather pass on the savings.

5. The listing agent will probably not sell your home. 

If he/she does, can they really represent you while, at the same time representing the buyer? Its done all the time. How can I fight for your best interest and the buyers best interest.

Can you imagine this happening in law? Imagine Johnie Cochran in a crime case as the prosecutor and the defense attorney! Doesn't make sense does it? 

6. Most Real Estate agents have very little practical knowledge about marketing or selling anything, let alone real estate.

First of all, the real estate exam that is required in order to sell real estate has little to do with the day to day selling of real estate.

 New agents often times have never owned a home, so they have little experience of the emotions and logistics that go with a sale and escrow.

The newbie agent is given plenty of the definitions and legaleeze that writers of the test feel important. Much of which I have never seen in my 15 years of selling real estate.

One of my favorite questions I remember is a multiple choice question that asks for the definition of deciduous. The definition is "leaves that fall annually".

Of course a very important morsel of information when you are trying to sell a $600,000 home! Excuse my sarcasm please.

Yet,  these agents are given even less practical knowledge on how to market and yes -  SELL real estate.

I believe it is because the industry is afraid of it's own shadow. I think they feel that if you teach agents to sell and market in ways that are effective, you will cheapen the profession.

When in fact that is exactly what happened. These newbies learned to sell like used car salesmen. Thus, the poor reputation of the industry.

These newbie agents must survive somehow, and with the old school commission model they are taught to "scrap" it out. "Dog eat Dog" so to speak.

It is not totally desperate for the new agent. Their loving brokers will often  train them in the "30 things I will do to Sell Your Home" marketing model.   

Almost anyone whom has been trained in the industry will relate to the following dissertation.

Mr. and Mrs. Seller, I am going to do many important things to sell your home:".....

The agent then goes thru a list of 20 or thirty items that they will perform for you. The items include a market analysis, brochures, signs, open houses, ads, and of course the MLS( amongst other things).

Nice . But as you obviously know the MLS does the trick anyway. The ads that you are paying for, are really helping the broker and agents to get more buyers and sellers. 

And you can price out your home on the Net anyway. 

 But this is what the industry pushes in order to justify their expense and to sell their value to you.

"these are my services" is the mantra sung amongst he industry elite.

In a book recently published, called "Real Estate a la carte", the author describes the trend in real estate to unbundle their services.

The author describes a survey she took amongst recent home sellers where she asked about their recent agents' services. The answers  should be disturbing to the real estate industry.

Many of the past sellers asked for her to clarify what she meant by good service. One person replied with an answer like "what do you mean service? My house wasn't sold"? They defined service as selling their home-as in sold, closed escrow!

The industry defines it with open houses ads, hand holding ad nauseum.

7. High Risk - High Cost  /  Low Risk - Low Cost

A Real Estate agent is a commissioned salesperson. Lower the risk to that agent and he/she will lower your cost. (if you ask!)

Imagine walking into a real estate office and telling a reputable agent that you want to list your home with him.

As he quotes his price he will immediately analyze his costs in procuring you as a client. It is zero! So his bottom line % he will charge you could be very flexible.

Low Risk  - Low Cost!

Now imagine the scenario where Miss agent calls you over the phone a year ago. She has sent you mailings, has phone called you, sent you market updates, etc.

This is more costly to her. She will probably have to spend time in a formal presentation, with her version of the "plan of action". Big promises in order to make her look better than the other agents you are interviewing. 

All this could possibly be a big fat waste of time. The nature of the process puts her in a high commission frame of mind.

Your Neighbor Could Cost You Thousands!

Other issues can cause commissions to rise. I went through the whole process in helping a buyer get difficult financing to assume a loan. They wanted to manipulate the walls of a town home which required special approval by the homeowners association.

Then after all this finagling to make the deal happen-one of them died. The escrow was canceled. Four months of work down the tubes.

As I mentioned before, real estate sales is a numbers game. Talk to so many people and so many will list or buy from you. 80% of the costs of your listing fee is in the costs a broker has incurred in the process of trying to find you!

High Risk - High Cost! Avoid it at all costs

You saw above how you can lower the risk for an agent. How can an agent lower his or her own risk? Through this program you are participating in.

Fee for Service means you pay a dramatically reduced price. Like a menu of services you pick and choose what you want.

You may want  to list your home by owner and have the agent step in at negotiation time. You can handle the rest.

There are many variations. I hope to have a link here soon with a list of  fee for service possibilities.

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