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As it gets more difficult for agents to make ends meet, I am hearing more and more in the Santa Cruz County market about property owners being told by agents that not putting their property on the MLS for the first so many weeks of the listing is beneficial to the homeowner. One local company has recently adopted this as their marketing thrust. This ill advised concept is presented as an "exclusive" or a "private offering" rather than what is really is... as an opportunity for one agent to make 2 commissions with neither the buyer nor the seller receiving the representation that they deserve. When this occurs, neither side has an agent who is negotiating what is best for them.
Sellers and buyers are being told that they can "save money by letting the listing agent represent both sides of the transaction." NOT true and NOT in the best interest of the buyer or seller. The only person who gains from the dual agency is the listing agent and his or her broker. A buyer saves zero as a result of the small percentage that a listing agent is willing to take off his/her commission in order to "write the deal" for both sides (since commission is paid by the seller). A seller can net far more plus receive more favorable terms when represented by an agent who is an effective negotiator as opposed to the seller giving up their right to have their agent negotiate exclusively on their behalf and only in their best interest.
The seller's best bet at getting the highest and best price and most favorable terms for their property is to offer the property on the MLS (Multiple Listing Service) therefore exposing the property to every licensed agent in the market area and offering those buyer's agents a commission to represent the buyer. This element in the marketing of the property is critical and time sensitive. As such, verbiage is incorporated into the contract written by the California Association of Realtors emphasizing the value of having a property on the MLS and the risk associated with not doing so. The MLS exposes a Santa Cruz County property to buyer's agents and buyers in five counties. No other real estate marketing provides such a widespread audience and all of the most widely used real estate web sites require a MLS # in order to market a home on those sites.
The most critical weeks to the success of a listing are the first few weeks. Studies have shown for years that the first few weeks are when a listing gets the most attention. So in those first 3 weeks all of the key elements to success must be in place, including MLS mass exposure. To ensure success, a listing agent must also have the cooperation of the seller to offer a fair market price, feature the home through professional photography (which draws the maximum number of buyers to the property) and must provide a comprehensive marketing plan that reaches every set of eyes that are in the market for such a property.
Many agents will respond to this blog saying that "in certain circumstances it is OK if the buyer and seller already have a meeting of the minds and just need someone to write the deal." I disagree, if both sides has representation, a far different meeting of the minds would occur and the person represented by a skilled, full time, professional negotiator would not get the short end of the stick. I welcome any and all comments from those for or against one Realtor double ending a transaction.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.