Potential and existing homeowners for sale should take the ongoing rhetoric of the National Association of Realtors (NAR) with a grain of salt. The NAR has a significant interest in how you choose to sell your property. Did you know that there is approximately $ 60 BILLION in real estate commissions paid annually (up 19 billion since 2000)? In a well-planned and funded effort to justify their services and the astronomical commissions they raise, the NAR spends millions of dollars each year flooding the average homeowner with advertising.
Real estate agents would have you believe that it is totally impossible to successfully market and sell your own home. The reason they propagate this fallacy is painfully obvious, but it is shocking how compelling they can be and how often homeowners fall victim to their ploys.
Let’s put to sleep some of the most common NAR rhetorics:
FSBOs don’t sell for less
FSBOs don’t take longer to sell
FSBOs don’t inadvertently expose themselves to would-be thieves, rapists, or murderers
FSBOs can effectively market their own property
FSBOs can effectively sell their own property
FSBOs can save thousands of dollars in fees
Truth be told, the National Association of Realtors does some very well. First, they collect, compile, and distribute highly accurate real estate-related data that can be very helpful when creating a Sales by Owner marketing plan. This data comes from hundreds of thousands of home sales, so the data is very accurate. Most, if not all, of the data is available on the Internet. This data includes, but is not limited to, average number of days in the market (DOM), median and average sales prices (compiled monthly and seasonally adjusted), unit sales by region, and unit sales by “Metropolitan Areas.”
The NAR also collects statistics related to “Buyer” and “Seller” trends, these statistics are generated through surveys of both buyers and sellers. Some of the data speaks volumes, for example, more than 70% of home buyers in 2006 used the Internet to find the home they eventually bought, before hiring a real estate agent. Second, 18% of home buyers said that the first presentation of the home they bought was a FOR SALE yard sign. Do the math – that means more than 88% of “BUYERS” found the property they eventually bought without the help of a real estate agent, yet 85% used an agent to facilitate the purchase, who say the marketing doesn’t work.
The second thing they do very well is market real estate; this is done through its proprietary data service, the Multiple Listing Service better known as MLS. This real estate listing data, although proprietary, is not restricted to real estate agents, it is available to virtually anyone with internet access. Realtor.com, the consumer-facing website is a by-product of the MLS, this premier marketing tool for Realtors is also available to virtually anyone. Homeowners for sale can invest in the Flat Fee MLS. The concept is simple: instead of the “listing agent” charging a commission based on the sale of your home, the owner agrees to pay a fixed fee to a registered real estate agent; This fee typically ranges from $ 399 to $ 699 depending on your geographic area and level of service. The agent simply agrees to list your property in the MLS. This exposes your property to all real estate agents through the MLS database and to most potential buyers through Realtor.com (remember that over 70% of buyers found the property on the Internet BEFORE hiring an agent) that enjoys more than 7 million monthly visitors generating more than 350 page views. WARNING: not all flat rate MLSs are created equal; make sure you know what you are buying and that there is some level of support.
One of the biggest problems I’ve always had with real estate agents (aside from their high commissions) is that they have a different mandate than the typical homeowner. The mandate of a real estate agent is to sell “a” house and receive his commission payment. The mandate of the owners is to sell their house. How often do you think a prospective buyer calls to schedule a viewing for a specific property (your property) and the agent says, “sure, we’ll schedule an appointment,” but while we were looking at that property, let’s look at those “others” that I think you might be interested in. “Personally, I don’t blame them, that’s how they make a living, I’d do the same, it’s called” betting coverage. “The inherent problem is that a real estate agent can be successful without the owner. A great example of this is the “Open Houses”, in my opinion, they are simply a lead generation platform for the listing agent. The “visitors” come to see your house, the agent takes their name and contacts them to sell them any house, they have simply used your property and your time as a hook.
I always have to defend myself, and I want to be clear, I don’t hate real estate agents. They definitely perform a service that some people are unable to perform. However, I have a problem with the fees they charge and their relentless attack on FSBOs. I’ve always felt that if someone had to race in an effort to justify themselves, that was a sign of weakness.
Simply put, you can sell your own home and save thousands of dollars; don’t be swayed by the NAR and its unsubstantiated claims. Don’t believe something just because you saw it on TV – it’s a shameless effort to protect yourselves, your association, and a livelihood that’s under significant pressure to justify your fees. It is not a coincidence that the US Department of Justice is currently investigating the industry for antitrust violations. Change is coming, and it will shake the very foundations on which this association was founded. The internet has changed the way people buy and sell real estate – it’s time for real estate agents to either embrace that fact and adjust accordingly or go the way of the Dodo bird.