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If you are thinking of selling your
property through a discount broker, we
suggest that you
read the results
of research
conducted by James Ford, co-founder of
the marketing research firm MarketStat
and a lecturer in the College of
Business at The University of Texas at
San Antonio, and Dr. Ron Rutherford, the
Elmo Burke Jr. Chair in Building
Development and Professor of Finance in
the College of Business at The
University of Texas at San Antonio.
Their
conclusion:
"Limited service representation is not
necessarily a better deal than typical
representation . . . real estate
consumers should be aware of the
qualifications of agents hired to
represent them."
And with a discount broker,
the total
commission on the sale of a home is
actually 4%,
not 1%. Please read on.
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SUMMARY OF RESEARCH
Generally speaking . . .
Property sold by a Discount Broker
SELLS FOR
LESS.
Property sold by a Discount Broker
TAKES
LONGER TO SELL..
Property sold by a Discount Broker
OFFERS LITTLE, IF ANY, NET SAVINGS..
For a PDF of the full research
article,
click here.
For full benefits of Premium
Brokerage Services, click
here.
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Dr. Rutherford and Mr. Ford refer to
discount brokerage as "limited
service representation" because the
seller generally receives limited
services and must do much of the
work themselves. You might be
surprised to know just how much work
is required.
Selling a home
is a tremendously complex process,
usually taking two to six months.
The average
real estate transaction requires
approximately 400 different
communications between the
various parties involved, including
-
phone calls, faxes, e-mails,
web-based communications, and
face-to-face discussions - between
the seller, seller's agent, buyer,
buyer's agent, title company,
mortgage company, taxing authority,
insurance company, home warranty
company, surveyor, home owner's
association, various inspectors
(like building, termite, septic, and
well), professionals (such as
attorneys, CPAs, and tax planners),
various utility providers, and more.
For
country property, even more time,
expertise, and communication is
involved.
Doing all of
this yourself might be worth it if
you were going to save enough money
to justify the so-called "discount
relationship",
but you probably won't.METENT
A LITTLE
The 1% sales pitch could be
considered misleading advertising
and will probably be challenged in
the courts under the Deceptive Trade
Practices Act by one or more
professional real estate
organizations. The facts and figures
in the Rutherford/Ford research shed
light on the reality of this
so-called discount. Using average
figures, the
commission on the sale of a home is
actually 4%. Although 1% does
go to the discount broker (the
seller's listing agent), another 3%
still goes to the buyer's agent (the
procuring cause of the sale).
Here's another important statistic from
their research on discount brokers:
"Sellers . . .
received 1.1% . . . to 2.2% LESS . . .
for a house," and "the marketing time
was 1.9 percent LONGER."
Considering the “time value” of money
lost from the longer time to sell, as
well as the lower price received for the
sale, you are unlikely to realize any
savings with "discounted" limited
services.YOU
GET WHAT YOU PAY FOR
There's a reason why this is considered
an axiom, and when
you hire a professional to provide a
service, it's especially true.
Would you prefer to save money by having
a new medical school graduate perform
their first brain operation on you? Or
would you shop around for the most
qualified, and undoubtedly more
expensive, surgeon who has many years of
success with happy, living patients?
It's simply not reasonable to expect
quality service for less.
Your home is probably your largest
personal investment. Looking after that
investment requires quality
representation. We suggest that you
interview carefully to make sure your
representation will be neither
insufficient nor inexperienced -- and
get it in writing.THE
BOTTOM LINE
What will you get when you
choose a
professional, full-service real estate
agent?
1. Someone
who will do all the work
necessary to give you...
2. The
best possible price for your
home,
3. In the
shortest amount of time,
4. With
the least possible risk.
At United Country - Central Texas, we
have decades of experience representing
clients, guiding them through the
intricacies of selling and buying
country homes and land in the Texas Hill
Country. We are
here to provide you with the skills and
expertise you need for a happy,
profitable outcome. We look
forward to your call.
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