Quote from MushinSeeker:
...The listing agent fee for a median listing in this area is $22,000. If the house sits for 6 months do you honestly think a broker will spend 5% of this $22k to advertise the listing? Let's see,- a yard sign with her/his face on the sign, a bubble container, maybe 400 brochures, maybe a 4-hour sunday open house held 4 times in this 6 months, a listing at realtor.com for what..$75/6 months?
TS: Some of these properties here are exceptional properties at rock bottom prices and have been on the market for over a year. At the height of things I easily dropped $1,000/month for the high end magazine and special TV advertising etc. When I realised that we were in the "who sees the fallen tree in the forest" mode of market I realized that advertising was a complete waste since there were NO real buyers to be had at any reasonable price. We just kept price up and implied "negotiable" terms since a price war is SO EASY especially in a condo where other sellers will start an tit-for-tat equity war. So I had to change tactics and go find buyers with lead services where are very expensive. Its hard work in this market and very expensive and we are liable for these listing data and security of sellers house/property etc. and must screen buyers since there are a lot of thieves shopping empty homes as buyers all over.
In your paragraph about cherry picking listings, you mentioned that you would laugh discretely at sellers who want you to advertise their property. If listing brokers are not willing to do that, what are they paying them for? I don't think anyone should pay somebody 22k to keypunch room dimensions to the MLS.
TS: No, that's not exactly what I meant. I laughed at the ridiculous prices they wanted that were $50K-$100K above market price and all the demands they insisted on the specific kind of advertising I had to do then they had the gall to tell me to offer a discounted commission. First of all "I" am the expert on advertising not them - so I don't welcome an amateur hiring me to sell their property and then tell me how to do it. Secondly I now give ZERO discounts since I don't have the time to hold dead inventory nor want the liability or reputation hit on my name. No Realtor wants to have his sign in a yard for a year with no sale - thats negative for their personal reputation. And in this market I will never list a home for a premium price but will price it to sell and to stand out against other homes that are naively advertised too high but are inferior value. Pricing is an art since a property can be "tarnished" if it sits too long and then starts to develop a history of price drops and loses all price credibility with those buyers sitting on the fence. That just encourages a vultures waiting game and they will come in way under the lowest price they think you will eventually come down to. I simply will not even waste my time trying to get a seller to list with me if he is way out of bounds on any of these factors and we Realtors trade these kinds of stories all the time among ourselves about not waisting time on these kinds of sellers. In fact the current game is to try to refer them for a fee (25% of future commission) to competing "hungry" brokers to keep them busy with inventory that won't sell. That's about the only evil thing we do for entertainment among ourselves and makes fun stories at the bars.
While the buyer's broker is fielding calls from their "psycho" buyer at 10 PM and driving them to 20 houses the next day, the listing agent just has to sit tight, do a little ego massaging to the seller who in now anxious that his 700k house is getting no looks. (We all know the reason why...the listing agent gave the owner the price he "hopes" to hear and will "convince" him to lower price 50-80k over 5 months).
TS: You used the term "psycho buyer". Oh if you only knew how many arrogant buyers (especially New Yorker type) who demand all kinds of attention at any hour of the day or any day or holiday to come pick them up and show them and their visiting friends property. They expect you to drop anything you are doing so they can gloat and make themselves seem important to their family/friends. They try to treat Realtors like prostitutes. When I first stared off I put up with it now I just brush them aside and tell them to make an appointment. With one young man who had a net worth of $65M and was trying to impress his wife by telling me to make sure the home was clean before he arrived and to basically jump through hoops I finally had to get right in his face and say "you are a pain in the ass and not worth a $20K commission and I don't need to work any more so start acting civil or take a hike". He was shocked that a lowly Realtor could stand up to him and then realized I was way above his peer level and he ended up becoming one of my best clients and buys things over the phone now sight unseen based on my recs.
As much as I respect your opinion, I stand by my estimate that the marketplace will, 1 day, sort out this inequality and perhaps reward the buyer's agent with a bigger pie piece. Changes in the marketplace has always moved at a glacial pace, specially when bumping up against "pseudo cartels" like exchanges, NAR . Just look at trading floors. They were essentially unchanged for 100 years but look at the velocity of change in their form in the last 1.5 years!
TS: If I got paid a minimum for my time like a lawyer or doctor does I would advocate what you are talking about here. I save my clients tens of thousands of dollars or find them incredible and rare properties and I should frankly get paid more than a mere $20K for the level of service I give these people. Most don't understand it but a lot of clients expect a Realtor to be like a super concierge before and after the sale for an indefinite period of time. They want us to arrange custom work, structural modifications, arrange schools for kids, research builders and equipment and be knowledgeable about everything. This level of personal service should be reimbursed at a minimum rate of $250/hr since to play at the upper levels you have to be socially connected (members of all the nice yacht clubs and social circles etc.). I have even has to play the role of apparent escort date for one of my higher end female clients who wanted to me to take her to the nicer places and introduce her to others and get her into the grove of things. That can be an interesting position to be in when one is married but yes sometimes there is affection and expectations in the romance department too. I view that less frequent aspect as a fringe benefit though that is all deductible lol. Its great when they are classy and nice looking but some can be a real pain in the drain widowers with huge fortunes and commanding attitudes. But they also often bring new clients through word of mouth. Lol - maybe Real estate will evolve to sort of gigolo/concierge service since there is a lot of trust that is developed and personal interaction. I know one broker owned and operated by all women who are kind of playing that aspect and dress very classy and play to the emotions and vulnerability of wealthy middle age men's vanity. That dances at the edge of ethics but they seem to do very well.
My lawyer who has handled closing in my area for 25 years has not heard of flat fee MLS where a seller can pay $400 and have their property exposed to hundreds of buyers agents. These firms are in my opinion what ISLD, ARCA, Schwab , Walmart were to their respective niches.
I love your idea of serial deposits to wake up my buyers. Gotta bring that up to my lawyer.
Thanks again.
