by Paul Slaybaugh | Sep 30, 2010 | Home Selling, Scottsdale Real Estate
Certainly, we are all aware that Real Estate fees are negotiable and that there is no set standard for the services of a REALTOR. Mind you, that does not mean agents are under any obligation to deviate from their stated rates, but it does mean that what Agent X quotes for his services is not to be mistaken for what Agents Y and Z might charge for theirs. That piece of legal housekeeping out of the way, there are means at your disposal for securing the best possible value on professional service from your agent. Follow this simple list of Do’s & Don’ts, compiled over the course of eleven years in the business, and you will give yourself the best chance at securing the lowest commission rate to go along with the level of service you demand.
Do:
- Refer me business. This one goes at the top of the list for a reason. In a commission based existence, new sources of business are my lifeblood. While it seems patently obvious, many simply don’t think about sending potential clients to their agent unless prompted. The primary reason that the fees in a Real Estate transaction tend to be high is the risk to the professionals involved. Mitigate some of the risk in an “eat what you kill” profession by helping me find my next paycheck, and I am more likely to reward the added security with a concession of my own.
- Provide me with repeat business. Unlike the wireless companies who are always offering deep discounts to new customers, I am far more likely to offer a lower rate to an existing client than the man off the street. As multiple transactions from a loyal client over the years will eliminate much of the reliance on cold business lead generation, we agents consider the client for life the holy grail of financial security.
- Be pleasant to work with. Touchy-feely as it sounds, no one likes working for a Napoleonic boss. I deal with all types in this business, but I’m more apt to offer a better rate to those I’m eager to assist than the rabid seller in the Hannibal Lecter mask.
- Do your homework. While I will inevitably have to help you unlearn a few things that you’ve gleaned from your internet sleuthing (amateur home evaluation via online calculator, anyone?), an educated client saves me time. That is additional time I can direct to procuring new business or coddling less prepared clients.
- Provide me with an excellent product to sell at my recommended list price. Some listings are simply creampuffs. Beautifully appointed and priced right, I know without a doubt that it is going to sell within 30 days on the market. While I will earn my keep in establishing value and marketing to fetch a top of market sales price, such creampuffs are the closest thing to money in the bank that this profession offers. I’m not adverse to reducing my normal fee if it means planting a sign in the yard of a home that will sell quickly and generate a ton of buyer calls (new potential business).
- Purchase with an eye towards future resale. This is an offshoot of the previous item. When looking for a new home, many buyers focus exclusively on their needs and budget. This is a mistake. Future value potential and desirability of the property across a broad spectrum of buyers is critical to not only your return on investment, but to its appeal to Real Estate agents as a listing sometime down the line. I won’t turn cartwheels when you call me to list a home for sale with a funky, unpermitted addition. A tough property to sell means no discounted rate.
See the pattern here? The idea is to give a little to get a little. Take away some of the financial risk associated with the job, and I can work with you on the reward. On the flip side, there are surefire ways to relegate yourself to the going rate. Avoid the following list of don’ts unless you enjoy talking yourself out of a deal.
Don’t:
- Ask me what I charge in advance of an initial consultation. It is human nature to want to cut to the chase, but lacking context, I have no idea whether your home is a creampuff or a dud. Further, demanding to know what I charge without giving me the opportunity to outline what services I provide for that fee raises a red flag. It sets an adversarial tone and tells me that you are likely going to be a grinder. Until you give me the opportunity to see the property, and/or you present me with a special circumstance that might make me amenable to a discounted offering, you are going to get quoted the standard fare. If anything, I might even quote a slightly higher fee than typical as I have no idea what I’m walking into.
- Haggle with me. There is certainly no harm in asking me about my fees (how could you agree to do business with me without knowing the costs, after all?), or asking if I would be willing to reduce them. Instead of trying to junkyard dog me into a lower rate, however, offer me something of value (see list of DO’s) in return. I don’t respond well to coercion, and I negotiate for a living. Give me a reason to reduce my rate, don’t blindly demand it.
- Own the only million dollar home in a $250k neighborhood. You must purchase and remodel/renovate shrewdly. Making poor initial purchasing decisions, over-improving for the neighborhood, or otherwise rendering your home difficult to sell is the single greatest saboteur of a better deal from me. Signing up for 6 months of marketing on an unsalable property will not put me in a generous mood. You’ll pay full boat, if I opt to take the listing at all.
- Play me off of other agents. It’s the oldest trick in the book, and one I can see coming a mile away. Fear of loss is a powerful motivator, just don’t be so obvious about it. A well-placed mention of the upcoming interview with another agent will work better than a full frontal assault of “Agent B said she’d list my house for ___%.” I know that I am likely competing for your business, and factor that into the rate I quote you. A subtle reminder won’t hurt, but a mugging will make me hold tight to my wallet.
- Approach me on one of my listings directly under the misguided belief that I will reduce my fee if you do not have representation. This bothers me on principle. I may offer a cooperating broker a percentage of my fee to produce a buyer, but under no circumstances does that percentage vanish or adjust if I am the only agent involved. I am actually hesitant to handle both sides of the transaction, as it opens the door to twice the transactional liability, and certainly will not double my workload for free. Regardless, this tactic is akin to cutting your nose off to spite your face. Go get yourself an agent of your own who will negotiate a better deal for you rather than dinking and dunking around with a percent or two of agent compensation. Think big picture.
- Ask me to reduce my fee if I find the buyer without the involvement of another agent. This is the flip side to the previous entry. Yes, I stand to earn a larger fee if there is no other agent involved in the transaction, but this approach is problematic in that you are essentially providing me with a disincentive to find your buyer myself. Why would I bust my behind and open myself up to the greater liability of handling both sides of the transaction for no additional reward? Such a commission arrangement essentially directs your agent to the couch, where he waits with feet up on the ottoman for a buyer’s agent to do his job.
I abhor the phrase “win-win.” So overused and misapplied to a business transaction. We are not Real Estate mediators, after all, but agents tasked with securing the best possible terms for our clients in the sale of real property. When it comes to the relationship between agent and client, however, it is the appropriate cliche. If we are to function as a cohesive unit to satisfy mutual goals, there are different routes to the “win-win” scenario. No need to butt heads when we each have things of value to offer in exchange for that which is most important to us. For consumers, that means making your agent’s job easier and directing future income potential his way. For agents, that means rewarding that consideration with quality, professional service at the lowest possible rate of compensation.
Symbiosis … it’s a beautiful thing.
by Paul Slaybaugh | Sep 23, 2010 | Promotions, Scottsdale Real Estate
Times were a buyer could reasonably anticipate that a seller would provide a one year home warranty policy with the sale of a home. Given the equity crunch that many are experiencing, and the prevalence of short sales and bank owned homes in the current market (which typically do not provide such policies), home warranties have gone the way of the buffalo as a throw-in to a Scottsdale home sale. With the lack of disclosures and repairs that accompany distressed property sales, however, such protection has never been more important. With that in mind, we are offering the following October promotions in addition to our always competitive rates.
For Buyers:
Free Home Warranty Policy – Register to utilize Paul Slaybaugh’s services as your buyer’s agent prior to 10/31/10 and receive a complimentary one year home warranty policy with your purchase at the close of escrow. See below for additional terms and limitations.
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For Sellers:
Free Home Warranty Policy For Your Buyer – Want to stand out from the competition by offering a home warranty policy to potential buyers? I understand the equity pinch may not make such overtures possible. Let me do it on your behalf. Register to list your home for sale with Paul Slaybaugh prior to 10/31/10, and I will provide your buyer with a complimentary one year home warranty policy at the close of escrow. See below for additional terms and limitations.
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Additional Terms: Promotion valid with website registrations prior to October 31, 2010 only. Close of escrow must occur prior to 10/1/11 for offer to remain valid. Promotion is offered exclusively and may not be combined with any other offer. Maximum value of $325 per policy. Not responsible for cost of additional coverage over and above $325. Not redeemable for cash value. Utilize registration form below to qualify.
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by Paul Slaybaugh | Sep 22, 2010 | Home Selling, Scottsdale Real Estate
Note: The following is the opinion of Paul Slaybaugh only, and, therefore, patently correct.
Unless you are trying to get under a specific price barrier, you are better off leaving your asking price alone than making a minuscule reduction.
Sounds contrary to logic, doesn’t it? And contrary to the groveling we agents typically employ to wrangle an unrealistic seller into the wakeful world. Why on earth would the guy who has been hammering you on price from the listing’s inception reverse course now that you are willing to acquiesce slightly?
Because a 5k price adjustment to a property that needs to come down 50k sends a signal to buyers, and not the one you think it does. Assuming I did not hit the hooch prior to the initial listing consultation and abet your decision to list the house for $404,900 (thus making it entirely likely that the eventual buyer for your house is not currently seeing it due to his searches being constrained by a 400k ceiling), such insignificant tinkering with the price essentially puts buyers and their agents on notice that you are not all that open to negotiation. Shaving a few measly bucks off the list price is equal parts admission that the current pricing isn’t getting it done, and revelation of an unwillingness to give up on the sales price targeted.
That’s a sales molotov cocktail.
If you move your listing price from $425,000 to $419,000, everyone and their mother knows you are still looking to command upwards of 400k.
Perhaps this is the message you hope to impart, but it makes you appear even more recalcitrant than you did prior to showing the modest reduction. Of the two primary goals of price adjustment – attracting a new group of buyers, and re-energizing those who have already seen the home – you accomplish neither. Adjustment for the sake of adjustment isn’t going to fool anyone and should not be prescribed haphazardly. It is just going to perpetuate the belief that, even upon further reflection, your opinion of value is not compatible with reality.
Many times buyers and their agents will put a home on the watch list if it appears to fit their needs, but is overpriced. That very first price reduction goes a long way in their determination as to whether your home is to be a viable contender. If you show a meager concession after 90 days on the market, they will intuit that you will not be open to an offer more in line with current values. Further, at the current rate of adjustment, it will take another 2 years for you to eventually work your way down to where you need to be. Adios muchachos, it’s on to the next contender for them.
If you really have no flexibility to drop your price, you are better served to keep them guessing as to your motivations and likely openness to negotiation. Better to show nothing than to show you are thinking about haggling in cents when the buyer is thinking in dollars.
If you need to reduce your price to break into the appropriate buyer demographic, bite the faux-equity bullet and do it. Doing so piecemeal not only alerts potential buyers to your likely miserly approach to negotiations, but robs you of the impact an appreciable change brings.
I know you don’t want to give your home away, and I would be derelict in my duty to let you do so. Just bear in mind that you cannot give away that which you don’t have. If your list price does not reflect current market value, you are fretting about closing the door on money that was never yours.
If you need to make a price adjustment, make it count.
by Paul Slaybaugh | Aug 7, 2010 | Home Selling, Scottsdale Real Estate
Thanks, but no thanks. Therein lie my in-depth feelings regarding buyer agent bonus compensation.
It’s a tricky business, this whole trust-building endeavor. From the initial consultation with a prospective client, to the signing of the closing documents and all stops in between, a certain rapport and mutual belief in the positive intentions of each party must be developed to produce the desired outcome: namely, the purchase of the most appropriate property at the most advantageous terms. With ample opportunity for an agent to unintentionally spit the bit along the way, warding off the encroachment of countless variables that would undermine the health of the relationship is an undisclosed facet of the job. And what, pray tell, is the swiftest and surest endangerment of one’s relationship with the client? Money. More specifically, the belief, whether founded or not, that the agent is twisting his fiduciary obligation by putting his financial interests before those of the client. That’s a relationship killer. Once any doubt creeps into the mind of the client as to the motivation of his representative, you might as well go ahead and split the sheets.
I don’t want a bonus to sell your listing.
If your listing fits my client’s criteria, and you are offering me fair compensation for services rendered, I will show the property. If you are offering compensation that does not meet my minimum standards, I will show the property if my client agrees to make me whole. Mind you, that’s a terrible disincentive to buyers and buyer’s agents alike, but run your business however you see fit. What I do not require is any kind of additional spiff over and above suitable compensation. An extra percent if the transaction closes in the next 30 days, a co-broke that is double the normal range of compensation, a week aboard the listing agent’s yacht after the close of escrow … all such supposed motivators are liable to call my judgment into question.
Am I really pushing property “x” because it represents that best value proposition for the client, or am I mentally slathering SPF 15 over my epidermis in preparation of the promised week in the Bahamas?
I’m not real keen on trying to explain to my client why I am grossing 20k on a $200,000 transaction while we are sitting around the closing table.
So while I appreciate the extra incentive a listing agent and/or seller may try to stoke via a buyer’s agent bonus, it calls my credibility into question. Matter of fact, I will typically apply any such bonus (if monetary value can be readily affixed) to my client’s closing costs. I maintain my reputation and my client gets an unexpected perk. In fact, I would be in breach of my personal ethics, if not my fiduciary obligation, if I didn’t carve out such extraneous allotments for my client’s benefit. If I am being compensated fairly for my role in the transaction, it is my duty to corral any additional nickels that fall out of the seller’s pockets for the buyer.
Want to expedite your Scottsdale home sale? Put the agent bonus back in your shorts. Repackage the offering as a reduced price or concession towards the buyer’s closing costs. Make the terms more appealing to my client and you will produce the desired result. The seller gets his fast sale, the buyer gets more attractive terms and both agents get happy, referral-prone clients. Everybody wins.
If I want to go play Dread Pirate Roberts in the Caymans, I’ll do it on my own dime.
by Paul Slaybaugh | Jul 28, 2010 | Home Selling, Scottsdale Real Estate
There are dragons lurking in the dark recesses of your property listing. Mean dragons. Scaly, grey, mean dragons that might rise up out of their lairs and go all Godzilla on your potential showings if left unchecked.
And what, pray tell, is the name of these marauding reptiles?
“REALTOR Remarks”
Ah yes, that hobgoblin of good intentions in the multiple listing service that provides for private communication amongst local Realtors. It gives me a good shudder just to type the name of the foul beast. Suburban legend has it that if you say it three times in front of the bathroom mirror with the lights off, you will doom yourself to a lonely stint on the market. Why? Because the private portion of the Arizona Regional Multiple Listing Service which is intended to impart “eyes only” information to the Real Estate sales force is home to some of the most spectacular lapses in judgment this side of New Coke.
“Do not approach cage, monkey will bite!”
“Disregard water damage in hall bathroom shower.”
“Bring me an offer, seller needs to sell NOW!!!”
From the laughable (“House is better than pictures make it look”) to the horrific breaching of client confidentiality (“Divorce situation: husband not cooperative”), one little notation in the private remarks of the listing can torpedo the price you command for your home, if not endanger the sale altogether. Alarm codes, additional showing instructions, agent to agent disclosures – all are intended fodder for the REALTOR Remarks section. The mistake that is often made, however, is that anything goes so long as it remains hidden from the prying eyes of the public.
The moral of the story? Read the full property listing before your agent inputs it into the MLS. While you will most likely view a copy of the completed listing once it hits the system, you will not be able to see what is privately disclosed to other agents. You will want to see a copy of the FULL listing to ensure that your best interests have not been compromised by a few careless words.
You priced the home well, staged it to look its best, had it professionally photographed, toured and dispersed to the far reaches of the Internet. Don’t blow it now, kid.
Of course, if you want me to avoid your home like the plague, make sure your agent denotes that it “smells kind of funky, but no known presence of mold.”
In the mood to receive offers that are 50% below your list price? Instruct your agent to notify fellow Realtors to “Bring me any offer and I’ll get it accepted!”
Unless the Stargate in the study presents a clear and present danger to those who would tour your home, best not to mention the possible credit for intergalactic species remediation.
