Who "sells" the house?

I am currently in the middle of an in-depth training program to become a "Certified Home Staging" expert and an interesting discussion came up in our down-time today. Many times a homeowner will call an agent, sign a listing agreement and then tell their agent to go "sell" their house. My question to you is... who sells the house?

Here is my take on the question:

You, the homeowner, have a product that you are bringing to a competitive market. You control the "product" but I control the image of that product. So who is more directly responsible for having the house sell (or not sell)?

Well, one way to look at my job as a listing agent is to break it down into four primary functions.

1) I must take the house you own and position it competitively within its market.

2) I must facilitate access to your home and focus on refining the public exposure and marketing of your home.

3) Once an offer is presented I must present the merits of the offer within its relation to your goals and the current market conditions. I will then present you the data from which we will build the case for your counter-offer. Finally I will deliver the counter-offers in a manner consistent with maintaining an amicable relationship with the potential buyers and their agent.

4) Finally, I will facilitate and manage the conditions agreed to within any offer and subsequent Purchase & Sale Agreement. This includes inspection contingencies, fire department inspections, appraisals, mortgage contingencies, and a pre-closing walk-through.

These are four major sections of the transaction, and each one of them has many smaller functions tied to them. For example, we need to make sure that we are pricing realistically for current market conditions. It would make no sense for me to give you numbers from April to price a November listing. You need better data than that. Second, bringing in a staging expert (someone certified) to consult with you and present a multi-tiered plan of attack for presenting the house to the public is critical. You, the seller, will be tasked with taking the staging tips and pricing data and coming up with an appropriate listing price based on how much work you're willing to put into the presentation of the house. While we're doing the "pre-launch" work we will most likely bring in someone to draw up floor plans and hire a professional photographer to highlight the feature elements of your home. We will also start working on a catered event designed to draw interest from your immediate neighbors. We might use this event to demonstrate some of the creative staging elements we have tried to incorporate in your marketing plan.

These, and so many other critical details, are just part of the listing package we agree to. As with so many contracted relationships, work must be done by both parties to ensure we make the strongest impression possible. If you are wondering why your house has not sold yet, take a look at some of these and match them with the efforts you've made on your behalf. Remember, at the end of the day I am tasked to facilitate and represent the sale of your home, but you are the one selling. Make sure you're taking an active role in the process!

What Commission Do You Charge?

It is amazing how many conversations about real estate start with that question. It baffles me to this day that this is the one field in which people think they can make a decision simply by how much money the professional practitioner will "charge" them. It gets asked other ways, like "what's your fee" and "how much will it cost me" but at the end of the day, it speaks to a backward mentality.

Let's run through an exercise here: You get a big bonus at work this holiday season and you decide you want to buy a fancy new car. Let's say you spend $80,000 on that car. When it comes time for that first service are you going to go from random mechanic to mechanic and ask them what their rate is? You'll most likely take it to someone who you have heard has specific expertise with that model car, and you'll most likely pay a lot more than the random mechanic who would have done who-knows-what to your car.

An even better example is picking a place to eat dinner. Do you open the yellow pages, start at the A's and call asking "what's the price of food?" First, there are steaks and lobster which will be a whole lot more expensive than burgers and fish sticks. There will also be places which will give you $7 steak and I seriously doubt you would feel comfortable eating it. The simple "what's the price of food" question just makes NO sense. If you feel like a steak, you're going to the Capital Grille or Abe & Louie's.

So, what commission do I charge? It's impossible to know. I need to see what type of house or condo you have, and then we need to have a serious discussion about your pricing before we can determine how in-depth we need to get with your marketing campaign. From there, we build out a marketing calendar and we decide which types of floor plans and virtual tours you will need.

The one important thing to look at is the agent representing your sale does not get 5-6% of the sale of your house. All agents should be cooperating with buyer's agents. This usually takes half of the commission amount. Next, most agents split their commissions with their offices who pay for Globe and Boston Homes ads, certain Open House materials and other incidental costs. I will say, on average, I am looking at maybe 1.5% of the overall sale price of your house before I even start doing my own personal marketing efforts for your house (floor plans, fliers, post cards, catered broker tours, etc...). Remember, all of these things are paid up front whether your home sells or not. So yes, maybe there is someone out there willing to give you a "rebate" or "charge" you a lower commission, but I assure you the Globe isn't charging them less than me for advertising and the floor plans I pay for aren't offered to them for less money either. By hiring that agent for less money, I will ask you.....how much will that cost you?

What does my agent do to market my house?

I get a lot of questions from people about what actually goes into getting a house out there on the market as effectively as possible. With the rise of "entry only" or "flat fee" MLS companies, I can tell that a decent number of sellers believe that their REALTOR simply goes to the computer, punches in a few numbers and comments, uploads a photo and then sits by the phone and waits.

Well, not exactly. You see, when I have a listing in a specific neighborhood, I know what agents tend to have a higher number of transactions (and therefore a pool of interested clients) in that area and I immediately arrange for those agents to take a look. Then, we target internet marketing to the community it will be best received by. For example, if I have a condo listing under $500,000 then I am going to go on craigslist with a slightly modified ad every 48 hours. I will try the various national search tools like Trulia.com, Zillow.com, Google Base and Active Rain. Now, everyone can do this part of it if they put the time into updating, so where does the agent come back into the picture? We now start tracking. My access line and toll free numbers are set up in a way where we can see which form of advertising is getting us the most interest. From there we work on refining and updating, giving us more and more of a presence where it has been reaching the best.

When I first get a call from a buyer, I make sure that I have already done my homework. I know that however that buyer came to me(website, classified ad, etc...) they've also seen other similar properties, and I need to have a conversational working knowledge of those properties. That way, while on the phone with the buyer I can compare and contrast right off the bat. Every property has a special hook, and I need to make sure that I can convey it each and every time. The buying customer might not have been in any of these properties in person, but if I can describe the relative strengths and weaknesses to each of them, I know that I have a better chance of getting them in the door of mine.

Once the customer is in the front door, the marketing goes into full swing. Why should this customer buy this specific house or condo? Well, it starts with finding out why they're buying. If one person wants a bigger kitchen then we're going to walk into the kitchen first and let them spend time exploring. I then speak of my views of the kitchens in the other homes or condos available in that neighborhood. We'll linger in the kitchen because that is one of the most important factors in the decision. Yes, this condo or house might have a lot of extra basement storage, but that is not why they're here, so why go there?

Finally, once the buyers have taken a look, I immediately ask them when they want to come back to see it again, or who needs to see it before they can make a decision. This is a perfect method for getting feedback right then and there to give to my sellers. This way, if I have a showing 20 minutes later, I'm armed with the most recent views and impressions to help lead me to a successful showing.

Once the buyers (with or without their agent) leave, it then falls on me to make sure they understand the financial reality of buying this home. If I need to break it down to how much it will cost them per day compared to their current home, or if I need to talk them through the costs of the transaction, I need to do it sooner rather than later. I also, especially if they're working with another agent, need to let them know which homes they should go visit to compare and contrast my listing. The longer a buyer has, the less likely they are to actually move forward. While it's not my job to create an offer where there otherwise would not be one, it is my job to take away as many of the barriers and objections to that offer as quickly as possible. This way, if an offer does not come, we have pin-pointed why and can adjust our marketing and presentation accordingly.