Amazing: The Newspaper Got Something Right
For several years now, the St. Petersburg Times has run articles advising home sellers to either negotiate real estate fees to amazingly low levels or to sell property as a "For Sale By Owner". They've run enough articles on how to sell property by yourself to publish a book on the subject.
Of course, those were the days when real estate was booming, prices were rising, there was a shortage of available property in the area, buyers were bidding prices up over the asking price and virtually anybody could put a little red and white "for sale" sign in the yard and have offers coming in that very day.
I always felt the Times was shortsighted with this approach because it showed that the newspaper never fully appreciated all the things that take place in a real estate transaction that are handled for the seller and buyer by the agent -- things that are worth paying for, and in many cases keep the parties out of court.
That was then. This is now.
Today, with property sitting unsold for months and months and buyers reluctant to make offers, the Times is now advising sellers to pay the commission and hire an agent. Or at least, it seems like they are giving out that advice.
In an article headlined "Agents: Commissions help move the merchandise" which appeared on page 10F of the June 9, 2007 issue of the St. Petersburg Times, the paper seems to acknowledge that the aggressive marketing efforts available to sellers from real estate agents may justify the commission, and that for the first time in years real estate sales commissions are rising. It tells that the average nationwide commission rose 1/5th of a point to just under 5.2 percent last year, and that some big hitter real estate agents in California and New York are insisting on commissions of 6-1/2 to 7 percent, and getting them.
I have been saying for a long time in the pages of this blogsite that any seller who does not pay a full real estate commission in shorting himself of an opportunity to sell his property. Here's why ...
The simple fact is that real estate commissions are split between the listing brokerage and the selling brokerage. Real estate agents get paid ONLY by commission. So, if you reduce the commission you are also reducing the agent's income. If you're a seller, do you really think it is a good idea to cut somebody's income while asking them to do a full marketing program to sell your property? Where's the incentive to the agent in that? Do you think it's a good idea to reduce the amount of money you'll pay to an agent for bringing you a buyer and expect agents to actually bring buyers to your house? Where's the incentive in that as well?
Cutting a commission is like cutting your own throat in the world of real estate today.
The St. Petersburg Times article seems to stress this reality: "In slow-moving markets glutted with homes for sale, listing agents seek to entice buyer's agents with high 'co-op' commissions. Most commissions are split between the listing agent and the selling agent who brings the buyer to the table." Today you can't entice anybody to bring you a buyer with a discounted commission -- that's the reality of the situation and the reason to offer a full commission.
As a seller you might want to take the advice offered by the St. Petersburg Times and make sure you offer a full commission. It's one of the best ways to entice buyer agents to bring potential buyers to your property. In fact, it might be the best way of all. Remember, on average, the listing agent finds the buyer only about 1 time in 9. So 8 out of 9 times the buyer is coming to you from a buyer's agent. Do you really think it is a good idea to offer the buyer's agent a reduced commission -- especially when owners of homes similar to yours are offering a full commission? Just keep that in mind when you start talking about listing your property.
For more information about real estate in the Tampa Bay area, visit my website at www.TheStPeteRealEstateSite.com.
Of course, those were the days when real estate was booming, prices were rising, there was a shortage of available property in the area, buyers were bidding prices up over the asking price and virtually anybody could put a little red and white "for sale" sign in the yard and have offers coming in that very day.
I always felt the Times was shortsighted with this approach because it showed that the newspaper never fully appreciated all the things that take place in a real estate transaction that are handled for the seller and buyer by the agent -- things that are worth paying for, and in many cases keep the parties out of court.
That was then. This is now.
Today, with property sitting unsold for months and months and buyers reluctant to make offers, the Times is now advising sellers to pay the commission and hire an agent. Or at least, it seems like they are giving out that advice.
In an article headlined "Agents: Commissions help move the merchandise" which appeared on page 10F of the June 9, 2007 issue of the St. Petersburg Times, the paper seems to acknowledge that the aggressive marketing efforts available to sellers from real estate agents may justify the commission, and that for the first time in years real estate sales commissions are rising. It tells that the average nationwide commission rose 1/5th of a point to just under 5.2 percent last year, and that some big hitter real estate agents in California and New York are insisting on commissions of 6-1/2 to 7 percent, and getting them.
I have been saying for a long time in the pages of this blogsite that any seller who does not pay a full real estate commission in shorting himself of an opportunity to sell his property. Here's why ...
The simple fact is that real estate commissions are split between the listing brokerage and the selling brokerage. Real estate agents get paid ONLY by commission. So, if you reduce the commission you are also reducing the agent's income. If you're a seller, do you really think it is a good idea to cut somebody's income while asking them to do a full marketing program to sell your property? Where's the incentive to the agent in that? Do you think it's a good idea to reduce the amount of money you'll pay to an agent for bringing you a buyer and expect agents to actually bring buyers to your house? Where's the incentive in that as well?
Cutting a commission is like cutting your own throat in the world of real estate today.
The St. Petersburg Times article seems to stress this reality: "In slow-moving markets glutted with homes for sale, listing agents seek to entice buyer's agents with high 'co-op' commissions. Most commissions are split between the listing agent and the selling agent who brings the buyer to the table." Today you can't entice anybody to bring you a buyer with a discounted commission -- that's the reality of the situation and the reason to offer a full commission.
As a seller you might want to take the advice offered by the St. Petersburg Times and make sure you offer a full commission. It's one of the best ways to entice buyer agents to bring potential buyers to your property. In fact, it might be the best way of all. Remember, on average, the listing agent finds the buyer only about 1 time in 9. So 8 out of 9 times the buyer is coming to you from a buyer's agent. Do you really think it is a good idea to offer the buyer's agent a reduced commission -- especially when owners of homes similar to yours are offering a full commission? Just keep that in mind when you start talking about listing your property.
For more information about real estate in the Tampa Bay area, visit my website at www.TheStPeteRealEstateSite.com.
-30-
posted by Terry Ward | 7:58 AM
4 Comments:
Good morning!
First off, I promise I’m not spam. I’m with Turner Publishing and we have a book titled “Historic Photos of St. Petersburg” that we were hoping might interest you. I’m going around to all the bloggers asking if they’d like to receive a complimentary copy of this book in exchange for a possible review on their blog. This book is a 10x10 gift book showing a pictorial narrative of St. Petersburg through beautiful photos pulled from archives (some have never before been viewed). If you are interested, please email me with your address and I’ll have one shipped out to you right away. If you have any questions, you can visit our website at www.turnerpublishing.com or give me a call at the number listed below. We'd appreciate any feedback given and would love the opportunity to work with you! I appreciate the time you've given my email and hope to hear from you soon!
Thanks so much,
Liz Chenery
lchenery@turnerpublishing.com
615-255-2665
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