“One of people I interviewed,”said Sebastian,”was from a limited service company.” It was early Tuesday afternoon, and R.M. was having that postponed listing interview with the Cabot brothers. “So the way I understand it, I can purchase whatever listing services I want, forgo the rest, and save a ton of money on commissions. But with a full service listing, I get a lot more done for me, that I pay for big time with a larger commission. If it’s going to sell anyway, why not go with the cheaper option?” Reaching into his briefcase, R.M. fished out a blank piece of paper.
“Let me show you, using a comparison.” He drew a table with space for questions down the left side, then across the top he labeled three types of listings, For Sale by Owner (FSBO), Limited Service (FEE), and Full Service (FULL). “Now, let’s add your questions, here. Based on these listing options, what do you want to know?”
“The obvious one, how much will we pay to sell the property?”
“Before you get to selling, consider this. An assumption that a seller makes is that theirs is a valuable property. Sometimes that’s true but the corollary is not, that because it is theirs, it’s worth more than other similar properties. First, you have the question of asking price, which should be set objectively, not subjectively. Next assumption is that the property will sell. Most do eventually, though not necessarily at the original price. But selling can take anytime from one day to over a year, or longer.”
“Are you saying that I don’t know enough about it to set the right price?”
“Well, you don’t, do you, Sebastian?” Sebastian made a face at Matthew, for this remark.
“Sometimes, listing agents are ‘told’ the price by the sellers, no matter what we determine from the sold comparables. We hear, ‘take my price or you don’t get the listing.’ I’ve had sellers choose another agent because that agent agrees to the seller’s asking price. Very often properties like these languish, overpriced, on the market. If I’m chosen, I’ve told sellers upfront to go ahead and try it for a week or so at their price but if there’s no activity to be prepared to mark it down, at once. You see, sellers must decide if they want to sell and move on or if they want to get a price. They think it is the same thing but very often it’s not.”
“Well, if they can’t get the price they want what’s the point of working with an agent anyway?”
“On the other hand, I’ve occasionally suggested that a price be raised slightly so that the property will come up in a different MLS search. It depends on the market. That’s one reason why it’s good to work with an agent knowledgeable in your sector of the market because after several months or a year, the market conditions will have changed. Asking price is usually a large part of that change. And it doesn’t necessarily always go down.”
“OK, so if I set a good price, and I’m willing to do all of the work and deal with all of the possible complications of a sale, then there’s a chance it will get to closing. What is the work exactly? The discount firm implied that it wasn’t anything much, nothing that anybody couldn’t handle.”
“Unless of course, they charged you for additional services, as you went along.” Matthew filled in. “But I interrupt. Please…”
“The discounters, as a group, do sell a wide range of services. However, there is no standard set by either the state or MLS regulators as to what they must offer. I’ve had experience working with some of them and each is a little different, except that they all require an entry level, upfront fee that usually includes an MLS listing, and then possibly a monthly fee on top of that. Depending on the discount program, a seller can opt for additional services or assistance, as Matthew pointed out. It’s hard for a seller to anticipate what they might need during the course of the listing.”
“But the work, you never got to that…”
“To cut to the chase, a full service listing agent handles all listing paperwork, takes and prepares photographs, markets the property in at least several appropriate venues, networks about it with other agents, manages showings, communicates with the seller, updates the listing as needed, either writes offers with potential buyers or presents co-broke offers to the seller, negotiates any counter-offers, follows through after offer acceptance with lenders, title companies, inspectors, other agents, or anyone else who has an interest. Point is, the whole process from start to finish may get bogged down at any one, or more, of these stages. Third assumption? An accepted offer means that the property will close.”
“So we’re being unrealistic to expect a quick and easy sale, and might tire of doing it all ourselves. For an agent, that’s his or her job?”
“Realistically, one of you should be close-by if you do it yourselves, especially at the showing stage, yes.”
“When I was on buying trips,” Matthew said, “Dad used to say to me, ‘Always ask yourself what effect this decision you’re making will have on customers visiting the store. They should be our bottom line.’ So my question is, what effect will our decision to list the condo in any of these ways on Sebastian’s comparison sheet here, have on our potential customers, or buyers, as you call them.”
“For example, I often group many showings on a single day, so buyers can easily compare them. If a seller is solely responsible for arranging property showings, that property may or may not be as accessible to buyers as other listed ones, simply because that seller may not be available at a specific time for a showing. We might have to come back to yours, and in the meantime, the buyers decide on something else.”
“So, you’re saying that I may miss some of the action unless I’m full service?”
“I don’t mean to suggest that there is a conspiracy against discounted listings, simply that they can be harder to get into than others.”
“But an agent could show it anytime, even if I wasn’t available.”
“If you had a lock-box and the agent had called you beforehand to set the appointment, yes.”
“Is that the only problem?”
“When you are shown a property by the seller, as opposed to by a neutral agent, the seller often stays during the showing and ‘helps’ the customer to see the property.”
“The hovering clerk. Not so good. Anything else?”
“Once, I presented an offer to a seller and he literally did not know what to do with it. I ended up writing a counter-offer with him for my own buyer. Not exactly kosher. That and, well, sellers give away things sometimes that an agent would advise them against. Concessions the seller paid for that were already disclosed in the condition report, for example.”
“So what do we pay up front or during the listing, with a full service listing?”
“Nothing until closing, generally, no matter how long that takes, and then the agreed commission. And the title update and the transfer tax but that’s as you would for any type of listing.”
