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fjSo I am selling The Loft. It seems necessary if I am moving away. Bad time to sell real-estate in the US, but it could be worse: I could be trying to sell somewhere else than in Los Angeles city itself. I need to find a broker, then.
Now, what does a broker do? I am not entirely sure. They seem to list you on their big shared listing system, the MLS. They find out what you should set your price to by looking at what comparable units sold in your area, they call that "running comps". They stage, they photograph, make flyers, put out signs with balloons for open houses, tell you what your house should look like or find people to make it happen, and more. They also know which other brokers to talk to who have clients, or so they say. For this want they 3% of the sale price when you sell. You also need to pay the broker for the buyer 3% for bring you a buyer. Sell a half-million dollar loft and already you spend $15K on middlemen whose main skills seem to be entering data and running the color printer.
Or is it? Am I being mean, naive, or just ignorant? Maybe they have really good marketing plans or other things I do not know?
Of course, the WWW sees middlemen as damage and tries to route around them, or help you find better ones. An example of the first is RedFin. A seller signs up with RedFin and describes their house on a web-page. RedFin will find stagers and photographers and use their results to make your property look even better. Then RedFin auto-prints flyers, tells you where to pick up "For Sale" signs to put outside your house, and that you should bake cookies when it's time for an open house. They will list the place on the MLS, Yahoo homes, Zillow, etc, with your open house times, so hopefully buyer brokers will see it and people will come by. They will also give you a lockbox, a little safe you attach to your front door that opens with a numerical code, to put your front door key in, so brokers can come in when you are not home. So you do everything yourself to sell your place, except you do not know people and hope the listing on the MLS will get you foot traffic. RedFin will negotiate for you, handling all the official paperwork that comes with negotiating a price, going into contract, doing the final sale. For all this RedFin asks a flat $3K5. For a half-million dollar loft, the seller saves twelve thousand dollars by making their own cookies and smiling on Saturdays, RedFin says.
Seller brokers are screaming bloody murder on their blogs about RedFin. They invest tons of time in open houses and flyers and relationships with other brokers and other buyers and other sellers, and they have teams and workers to pay, they get only paid when they close, and now they have a down market on their hands. They see what Amazon did to indie book sellers and wonder if the Internet will take them out next. The ones who have been brokers for the long haul are less worried, they have seen these assist-to-sell brokers come and fail before, but do know that while this one plays out, things will be a little leaner. Still, times are tough for realtors. I know of one here and two in Fort Lauderdale who are looking for real jobs again. It is just lean times for those who started in the last 5 years, often with no sales in 2007 as buyers are skittish or uanble to get credit now, and sellers will not take their losses from when they bought during bubble years.
The web also tries to help you find a better middleman. HomeGain and AgentMachine have services for sellers where you enter some details about the place you want to sell, and they send it to seller brokers who have signed up with them, so these brokers can send you a response back why you should engage them. I used HomeGain to describe my space, but also as a chance to ask specifically, why should I hire you?
I had 4 or so questions in my application. Some might be seen as tough, but I truly think that is ok to ask someone I am about to go into an exclusive relationship with about the largest asset I have that results in me handing over 5-figure dollar amounts. How long have you sold in downtown Los Angeles, which is a difficult and very new area with its own quirks? How many properties have you sold in the last year, or 3 months? What can you give me that RedFin cannot, seeing as I am unemployed and can let in anyone any time?
I got 10 responses on HomeGain. 2 of those were from the same team of people, so those are out for not coordinating with each-other, it looks really bad. Those included, 8 were pages of boilerplate responses about how they had 12 to 21 point marketing plans that include how your home should look neat and what color flyers they will make and how experienced they were selling homes in my area, like Encino or Pasadena. Of those I am more inclined to take the one who speaks Korean and Mandarin since the dollar is low and DTLA is right next to Koreatown, but otherwise, no. One of them offered to buy the place if it was lsited for more than 120 days, I expect this means listed at half price for 120 days, but I should call, I think. And only one single respondent actually answered my questions, and his answer of what service he provides is that it will be a High Touch experience: he will be there, he will make it painless, he will negotiate for a high price for me. Ok, you know what, still sounds a little vague, but at least he answered what I asked.
And then there's John. John was proposal number 10. John didn't send me pages of boilerplate. John didn't write soothing or exciting words about how he has teams of people ready or knows the Los Angeles market inside out or will put me on his personal real estate site, or even educate me about what he has that I cannot see. No, John used HomeGain to send me:
And then there's my neighbor. He scoffed at this story and told me to just put it on Craigslist, of course that will sell.
Now, what does a broker do? I am not entirely sure. They seem to list you on their big shared listing system, the MLS. They find out what you should set your price to by looking at what comparable units sold in your area, they call that "running comps". They stage, they photograph, make flyers, put out signs with balloons for open houses, tell you what your house should look like or find people to make it happen, and more. They also know which other brokers to talk to who have clients, or so they say. For this want they 3% of the sale price when you sell. You also need to pay the broker for the buyer 3% for bring you a buyer. Sell a half-million dollar loft and already you spend $15K on middlemen whose main skills seem to be entering data and running the color printer.
Or is it? Am I being mean, naive, or just ignorant? Maybe they have really good marketing plans or other things I do not know?
Of course, the WWW sees middlemen as damage and tries to route around them, or help you find better ones. An example of the first is RedFin. A seller signs up with RedFin and describes their house on a web-page. RedFin will find stagers and photographers and use their results to make your property look even better. Then RedFin auto-prints flyers, tells you where to pick up "For Sale" signs to put outside your house, and that you should bake cookies when it's time for an open house. They will list the place on the MLS, Yahoo homes, Zillow, etc, with your open house times, so hopefully buyer brokers will see it and people will come by. They will also give you a lockbox, a little safe you attach to your front door that opens with a numerical code, to put your front door key in, so brokers can come in when you are not home. So you do everything yourself to sell your place, except you do not know people and hope the listing on the MLS will get you foot traffic. RedFin will negotiate for you, handling all the official paperwork that comes with negotiating a price, going into contract, doing the final sale. For all this RedFin asks a flat $3K5. For a half-million dollar loft, the seller saves twelve thousand dollars by making their own cookies and smiling on Saturdays, RedFin says.
Seller brokers are screaming bloody murder on their blogs about RedFin. They invest tons of time in open houses and flyers and relationships with other brokers and other buyers and other sellers, and they have teams and workers to pay, they get only paid when they close, and now they have a down market on their hands. They see what Amazon did to indie book sellers and wonder if the Internet will take them out next. The ones who have been brokers for the long haul are less worried, they have seen these assist-to-sell brokers come and fail before, but do know that while this one plays out, things will be a little leaner. Still, times are tough for realtors. I know of one here and two in Fort Lauderdale who are looking for real jobs again. It is just lean times for those who started in the last 5 years, often with no sales in 2007 as buyers are skittish or uanble to get credit now, and sellers will not take their losses from when they bought during bubble years.
The web also tries to help you find a better middleman. HomeGain and AgentMachine have services for sellers where you enter some details about the place you want to sell, and they send it to seller brokers who have signed up with them, so these brokers can send you a response back why you should engage them. I used HomeGain to describe my space, but also as a chance to ask specifically, why should I hire you?
I had 4 or so questions in my application. Some might be seen as tough, but I truly think that is ok to ask someone I am about to go into an exclusive relationship with about the largest asset I have that results in me handing over 5-figure dollar amounts. How long have you sold in downtown Los Angeles, which is a difficult and very new area with its own quirks? How many properties have you sold in the last year, or 3 months? What can you give me that RedFin cannot, seeing as I am unemployed and can let in anyone any time?
I got 10 responses on HomeGain. 2 of those were from the same team of people, so those are out for not coordinating with each-other, it looks really bad. Those included, 8 were pages of boilerplate responses about how they had 12 to 21 point marketing plans that include how your home should look neat and what color flyers they will make and how experienced they were selling homes in my area, like Encino or Pasadena. Of those I am more inclined to take the one who speaks Korean and Mandarin since the dollar is low and DTLA is right next to Koreatown, but otherwise, no. One of them offered to buy the place if it was lsited for more than 120 days, I expect this means listed at half price for 120 days, but I should call, I think. And only one single respondent actually answered my questions, and his answer of what service he provides is that it will be a High Touch experience: he will be there, he will make it painless, he will negotiate for a high price for me. Ok, you know what, still sounds a little vague, but at least he answered what I asked.
And then there's John. John was proposal number 10. John didn't send me pages of boilerplate. John didn't write soothing or exciting words about how he has teams of people ready or knows the Los Angeles market inside out or will put me on his personal real estate site, or even educate me about what he has that I cannot see. No, John used HomeGain to send me:
"Why don't you just save the commission? It seems you don't value the job of an experienced real estate broker. Try to sell it...just Redfin and you. Good luck, JC"HomeGain also mentions John sold 0 propertries in 2007. I wonder what his fallback career is.
And then there's my neighbor. He scoffed at this story and told me to just put it on Craigslist, of course that will sell.
no subject
Date: 2007-12-06 12:06 pm (UTC)I have sold a number of homes. If I was in your position, I would try Redfin. Nothing to lose and money to gain. The MLS is the important thing. Then, try everything else you can think of.
no subject
Date: 2007-12-06 12:07 pm (UTC)no subject
Date: 2007-12-06 02:39 pm (UTC)This is not to say you can't handle the process of course, and things could run really smoothly. I did want to put in a good word for agents who are smart and genuinely working for their clients. Lots of folks just don't trust agents. He had clients who came out and said, "why wouldn't you just try to get me to buy the most expensive property you could so you're commission would be higher?" Maybe some agents operate that way, but George is very ethical and really wants people to end up in property that is the best fit for them.
I guess the key is, if you do use an agent, just get a really good one, and that requires some asking around, like you are doing, and some luck. (a referral from someone you trust is really best).
That was long-winded.
no subject
Date: 2007-12-07 10:11 pm (UTC)You may have a great experience selling the house without an agent. I bought twice and sold once with an agent and I am happy with what she did for us. Would I really want to go through the whole thing of process of price negotiation, responding on seller demands based on inspection, etc. by myself? No way. And I am pretty sure our sale last year would have fallen through if we did not have an agent.
But benjiej is right - if you get an agent, you have to get a good one. I got mine through friend referrals.
no subject
Date: 2007-12-06 02:46 pm (UTC)And like Ben said, 90% of it is closing the deal. A good agent can get done.
no subject
Date: 2007-12-06 03:07 pm (UTC)Or is it? Am I being mean, naive, or just ignorant? Maybe they have really good marketing plans or other things I do not know?
In order to expound on what Ben said, what we're seeing is a different business model (Redfin) to handle the same process. The problem with agents is that they, like hair stylists, usually pay for the privilege of agency association in the form of annual fees, not to mention paying for their own health insurance and other benefits that we take for granted in our employment. They're essentially freelancers and we're comping them for their overhead, in the form of rather whopping percentage commissions.
In the past we were happy with a certain agent so we used her a second time and negotiated a lower comission. I'm not sure how that well that tactic would work given market conditions now, though.
no subject
Date: 2007-12-06 04:51 pm (UTC)Thank you for using the HomeGain system. We at HomeGain pride ourselves on the excellent services the majority of our member agents provide our consumers such as yourself. Occassionally a proposal like the one you received from JC, which is clearly substandard and inappropriate, will get through the system. I invite you to contact me directly so that we can review the agent's account in question and take appropriate measures.
Peggy Boehm
HomeGain
Director, Client Services
p 510 420 4209
peggy@homegain.com
no subject
Date: 2007-12-06 11:04 pm (UTC)no subject
Date: 2007-12-06 05:18 pm (UTC)Not to be picking over the bones or anything, but are you interested in selling your car? I'm looking at Scion xB's- which I think is what you have, no?
Redfin apparently does a good job. They do a better job when the client is able to put up a website w/photos and a floorplan. We can talk, if you like.
no subject
Date: 2007-12-06 05:28 pm (UTC)no subject
Date: 2007-12-06 06:38 pm (UTC)no subject
Date: 2007-12-06 09:47 pm (UTC)no subject
Date: 2007-12-06 10:02 pm (UTC)Good agents have enough experience in dealing with buyers, sellers, and all the other entities that get involved that they can often give you good advice, help avoid dead ends, and speed up the process.
If it is a local agent they might really know the local market - what sells now and what doesn't.