A follow up with a For-Sale-By-Owner Listing led to the posting of this article.
Whilst some sellers might want to sell their own house in order to save the commission for the agent, the two questions to ask would be 'Is it a real saving to save the commission for engaging agents?' and 'What are the values that an agent can bring to the table for clients who engaged an agent?'.
The real estate business is a commissioned based career based on a percentage of the sale price because there will be an incentive for the agent to work harder to earn a higher payout for the transaction. There might be some critics who will argue that the marginal increase in the selling price yields lesser returns for the agent than the sellers hence there is actually lesser incentive for agents. However, I beg to differ as it all depends on the agent's vision in this industry.
My team-mates and I are here for GOOD and we would rather work hard for clients to get referrals in future than to bother about the marginal returns. Choose your agent. If you are paying good money for agents to serve you, choose the most qualified agent to serve you. Armed with a degree in Real Estate, I believe I will be able to serve your needs well.
Real Saving from No-Commission???
Some clients might not pay the commission by self-serving, however, after being in this business, I realised that the amount that is paid to the agent is definitely justifiable if the agent is knowledgeable and resourceful.
In life, the buying and selling of houses will probably be the biggest transaction of our lives and yet we are stingy in engaging a well-qualified agent to assist in the transaction? It is disheartening and disappointing when sellers/buyers did not have enough information on the analysis of the pricing of the unit and eventually led to getting selling below market price or paying too much above the market price. Is there really savings from the transaction then? I doubt so.
The hardest thing to do in life is NOT TO MAKE A DECISION but to get ENOUGH INFORMATION TO MAKE A DECISION.
What are clients paying the agent for? It is to pay the agent for his/her expertise in the Real Estate Field, his/her knowledge in the policies in Real Estate Agency Work and for his/her hard-work and marketing cost in getting a buyer for the unit.
Value of Agent: More information to assist client to make a better decision. A good agent would have access to paid information from various mediums to assist him/her to advice his/her clients. I had 3 paid tools to assist me in serving my clients.
Marketing Exposure
In terms of marketing exposure, I had encountered many owners who wanted to sell their house on their own and they did not have any online marketing tools except for those that are free.
There is a vast difference between paid property website like propertyguru and iproperty vs ST701/MOCCA/Propertyexchange.
First, if free websites are as effective as paid websites, would agents pay for the websites to market the property that they are selling? Obviously, the answer is NO. Agents are also people who are looking for cost savings measures and if there are agents who are using paid websites and not free websites, there are definitely reasons why it is as such.
Second, without paying for the websites to market the properties online, will there be aggressive marketing of the website on buses, taxis, billboards etc to get buyers/sellers to go to the website? The answer is NO. There is no incentive at all for the free websites hence by paying for the website, the marketing of the website will ensure that the traffic to the website will be more than those free websites.
Third, will it make any economic sense for owners to get an account to market his own property? The answer is NO as well. To the agent who is marketing a number of properties, there would be economies of scale for him to subscribe and pay for all the websites and at the same time use all the free websites as well and that will help the seller increase the exposure and capture more buyers. By capturing more buyers, there will be a higher chance of getting a better price for the client.
Value of Agent: Assist to increase the marketing exposure for the client to get a better price. A good agent would have access to paid websites to assist him/her to market the properties. I had 2 paid websites to assist me in serving my clients.
Third Party Negotiation
Without an agent serving the owner in the sale of the house, the owner will first have to disrupt his privacy and peace by having a lot of calls from buyers and agents to enquire on his house even into the wee hours of the day. And upon some buyers/agents knowing that the owner is without an agent, it might spell some trouble for the buyer/agent as the knowledge of the owner on the property transaction is questionable and it might led to the deal being complicated, due to the lack of knowledge.
On top of the 2 points highlighted above, I think that the most important part of the whole deal is in the negotiation. By having an agent to handle the case, there is a third party involved and this will allow the owner to have more control of the situation. Some owners might get emotional in the negotiation process and lose the negotiation which in turn loses the chance to negotiate a good deal. An agent who is more experience in the art of negotiation will help a great deal as the agent will protect the interest of the client.
Value of Agent: To use his/her experience to assist the client in the negotiation process and to be the buffer for the client so as to manage the emotions of the client.
Conclusion
If Real Estate can be transacted by Owners without any disadvantages, the Real Estate Industry will not require any Real Estate Agents to transact the deals on behalf of Clients. If a Real Estate Transaction is a simple and fuss free process, then Real Estate Agents will not need to be regulated and there will be no requirement for Real Estate Education for the Agents.
Hence, I do opin that the marketing of Real Estate should still be left to agents who are in the market and would be able to feel the pulse of the market better and also to use tools, that would increase marketing exposure, and help the client to get a better deal.
If you would like to save on the commission, I would strongly suggest that you negotiate with your agent and to strike a fair deal for both parties. There are advantages for the client and there are costs for the agent and when both parties are fully aware of this, there will be lesser possibility of conflict.
A video that sums up all that is needed to explain...
PS: I realised that even in the US, the situation is the same. Check this website out: http://medinareport.wordpress.com/2008/11/25/for-sale-by-owner-fsbo-does-it-save-you-money/
Lovely Regards,
Lynn ONG (王丽英)
Third Party Negotiation
Without an agent serving the owner in the sale of the house, the owner will first have to disrupt his privacy and peace by having a lot of calls from buyers and agents to enquire on his house even into the wee hours of the day. And upon some buyers/agents knowing that the owner is without an agent, it might spell some trouble for the buyer/agent as the knowledge of the owner on the property transaction is questionable and it might led to the deal being complicated, due to the lack of knowledge.
On top of the 2 points highlighted above, I think that the most important part of the whole deal is in the negotiation. By having an agent to handle the case, there is a third party involved and this will allow the owner to have more control of the situation. Some owners might get emotional in the negotiation process and lose the negotiation which in turn loses the chance to negotiate a good deal. An agent who is more experience in the art of negotiation will help a great deal as the agent will protect the interest of the client.
Value of Agent: To use his/her experience to assist the client in the negotiation process and to be the buffer for the client so as to manage the emotions of the client.
Conclusion
If Real Estate can be transacted by Owners without any disadvantages, the Real Estate Industry will not require any Real Estate Agents to transact the deals on behalf of Clients. If a Real Estate Transaction is a simple and fuss free process, then Real Estate Agents will not need to be regulated and there will be no requirement for Real Estate Education for the Agents.
Hence, I do opin that the marketing of Real Estate should still be left to agents who are in the market and would be able to feel the pulse of the market better and also to use tools, that would increase marketing exposure, and help the client to get a better deal.
If you would like to save on the commission, I would strongly suggest that you negotiate with your agent and to strike a fair deal for both parties. There are advantages for the client and there are costs for the agent and when both parties are fully aware of this, there will be lesser possibility of conflict.
A video that sums up all that is needed to explain...
PS: I realised that even in the US, the situation is the same. Check this website out: http://medinareport.wordpress.com/2008/11/25/for-sale-by-owner-fsbo-does-it-save-you-money/
Lovely Regards,
Lynn ONG (王丽英)
District Manager
ECG Property Novena District
L3009759F / R014-395F
BSc. Real Estate (NUS)
Mobile: (+65) 8479 3149
Website: http://www.LYNNONG.net/
[Blogging on Analysis of Listings and Real Estate News]
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