| In a world that is moving evermore toward the | | | | pay for it. The larger the potential market, the |
| internet, industries are having to adapt at an | | | | greater the need for a diversity of marketing |
| accelerated rate, and this is true in the realm of real | | | | channels to ensure that exposure is maximized. And |
| estate as well. Many sellers are moving toward | | | | here's where the limited-service model loses traction: |
| internet real estate brokers, who promise results for | | | | just adding a property to a list is not, by definition, |
| a flat fee, eroding real estate commissions, but | | | | marketing. |
| perhaps eroding equity as well. | | | | Even if all the property data has been input correctly, |
| Copyright (c) 2007 Jesse Moore | | | | enabling comparison to competing properties, and |
| Is there anything in your experience that has | | | | assuming there is at least one photo of the property, |
| prepared you to expect something for nothing? No? | | | | the reality is that a multiple listing service is just that: |
| What a revolting revelation! But it seems to be | | | | an ever-evolving, growing list. It is a set of data |
| universally true-you get what you pay for-nothing | | | | regarding the particulars of properties within a |
| more, nothing less. Well, sometimes much less. | | | | market. Granted, the Internet has made it possible to |
| Occasionally more-maybe the folks from "Antiques | | | | distribute those lists to a wider audience, but this |
| Roadshow" can provide a few anecdotes-the $5 | | | | assumes again that all the information has been input |
| garage sale find that should be insured for $17,000, | | | | correctly, that there are multiple, useful and appealing |
| for example. However, I think we all know that | | | | photos, and that a modestly competent copywriter |
| these are the exception rather than the rule. | | | | has taken the time to write some decent lines about |
| So why is it that when it comes to real estate, for | | | | the property so that the average prospective buyer |
| many there is an overwhelming compulsion to believe | | | | might be at least compelled to take a look. My |
| they may be the one beat the system? Maybe it's | | | | experience says otherwise. |
| because the perceived rewards are potentially great, | | | | I was introduced to a property three weeks ago by |
| and this is the primary niche that most of the | | | | my partner when he recommended I take a look at |
| discount brokerages seem to have targeted their | | | | "this awesome piece of real estate." On the way |
| message to. Realistically, I believe there will always be | | | | back from another appointment, I stopped by to see |
| a segment of the market that has a need to | | | | what he was talking about and was fortunate to find |
| maintain control, regardless of the costs in time and | | | | the sellers home. They gave me a tour of their |
| money. And they certainly earn that right-paying | | | | beautiful grounds and the spacious, if somewhat |
| dearly in reduced sale prices relative to the market. | | | | dated, home. The property was to die for. The |
| According to the NAR, FSBO (For Sale By Owner) | | | | home needed some attention to bring it up to |
| sales were down in 2006, from 13% of sellers in | | | | current decorating standards, but the primary issues |
| 2005 going it alone to 12% in 2006. This would | | | | were flooring and paint which are easy fixes. The |
| suggest that the shifting market has persuaded | | | | sellers acknowledged they had been banking on the |
| some sellers that the rewards of an unrepresented | | | | appeal of the property and were slowly realizing that |
| sale are diminishing as the requirements of marketing | | | | our current market is not the run and gun' model |
| a home, negotiating the transaction, and shepherding | | | | many sellers have come to expect from the past |
| all parties and paperwork through escrow has | | | | few years. |
| become more time and resource intensive. | | | | When I got back to the office, I pulled up the listing |
| Based on this and the fact that nationally the housing | | | | and was surprised to find that the home had been |
| market has slowed relative to the past five to six | | | | listed originally for 27 days with a single photo-shot |
| years of a decidedly seller-slanted market, I have | | | | from 1/2 an acre away-slightly blurry and not at all |
| begun to wonder what the draw could possibly be | | | | descriptive of the park-like grounds. When the |
| for those sellers who elect to go with a discount or | | | | property was canceled and relisted with the same |
| limited-service brokerage. I realize we're pushing a | | | | blurry photos, the sellers gave me a call to ask if I |
| very large rock up a steep and slippery slope, but it | | | | would be willing to meet with them to discuss taking |
| seems to me that the disconnect starts with a | | | | their listing. We set a time to meet, and I began |
| misconception about the job of an agent. | | | | assembling a customized listing presentation book, |
| Granted, years of comparison to the crusty used car | | | | specific to his situation and property. The morning we |
| lot crowd hasn't helped our image, but the latest | | | | were to meet, he left a voice message saying he |
| divergence in business models from limited/discount | | | | wanted to postpone as they had decided, after |
| to full-service and the range of options in between | | | | receiving feedback from a few folks, to replace the |
| has served to further cloud what were already | | | | vintage red shag carpets and needed some time to |
| murky waters. | | | | get that done. We rescheduled for the following |
| However, what seems to be getting lost are the | | | | week. |
| definitions of an agent. According to Webster's, an | | | | Meanwhile, the new issue of the book hit the stands, |
| agent is: | | | | and my partner received a call on this property, |
| 1. One who acts for, or in the place of, another, by | | | | requesting a showing. His new client expressed |
| authority from him; one entrusted with the business | | | | sufficient interest in the property that they ultimately |
| of another; a substitute; a deputy; a factor. | | | | viewed it three times-no offer yet. Meanwhile, I had |
| 2. An active power or cause; that which has the | | | | stopped by after vacation to refresh my memory |
| power to produce an effect, such as a physical, | | | | and take a few photos. While there, a couple of |
| chemical, or medicinal agent; as, heat is a powerful | | | | agents stopped by, doing comps for a new listing |
| agent. | | | | they would be putting up. I eavesdropped on their |
| To my mind, these two are inseparable: an agent | | | | conversation, as they echoed the speaking points I |
| should both execute the business of another, acting | | | | had begun outlining for my listing presentation-dated |
| in his place, with his authority, and producing a | | | | interior, fabulous grounds, need for staging, etc. |
| physical effect-in this case resulting in the sale of a | | | | We met to discuss listing his property (the original |
| property. | | | | listing agreement had expired three weeks prior to |
| To use the term agent' in any other context | | | | our meeting, but was still showing as Active on the |
| regarding a real estate transaction is misleading. While | | | | MLS), and while he appeared interested in my |
| a limited-service brokerage may have access to the | | | | presentation and seemed to agree with the final |
| local multiple listing service (MLS) and is authorized to | | | | analysis, the fact that he had seen some traffic |
| enter properties, its value ends once the property | | | | recently (two agents previewing and my partner's |
| has been dutifully added to the list. Frequently, they | | | | three showings) led him to believe he should stick to |
| offer no representation-leaving the seller to negotiate | | | | his current course. (Did I mention we met on the |
| his own transaction. And as an agent of change, they | | | | 80th day of his listing?) |
| don't market the property, because once it's on the | | | | The most telling thing happened later that day when |
| list, their job is done. So in both measures of agency, | | | | my partner called to schedule his last showing; as |
| there is no connection between its actions and the | | | | they were preparing to hang up, the seller told him, |
| title. | | | | "Just let your buyers know we're not expecting a |
| But truly this is just the beginning of my concern. The | | | | full-price offer!" |
| term marketing' is used generally to refer to the | | | | Had I been representing this seller, I would have lost |
| activities of making a product visible to a market. | | | | my mind! Imagine giving up that vital piece of |
| Whether it's widgets or wigs, pumpkins or property, | | | | information-to the guy you're going to negotiate |
| the concept remains the same-in a free market | | | | against. Worse yet, imagine that they paid their |
| system, the greater the exposure, the more likely a | | | | agent' $1000 for the pleasure of his services. |
| true value will be determined by a public acting of its | | | | What was it Cicero said? "Men decide far more |
| own free will, given access to comparable information | | | | problems by hate, love, lust, rage, sorrow, joy, hope, |
| about the specific products and available competing | | | | fear, illusion or some other inward emotion, than by |
| ones. Note that ultimately the value of a product or | | | | reality, authority, any legal standard, judicial |
| property is determined by what a buyer is willing to | | | | precedent, or statute." It's still true today. |