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Limited Service - The Right Choice When Listing?

There are many "flat fee" real estate start ups revolving around "partial service" and "do it yourself" listing platforms....There are also thousands of homes available in almost any market area. Could choosing Redfin, or one of many others desperate for your business be the right choice when considering the sale of your home?

How could your choice effect you?

Most "limited full service" listing companies, and their "clients", find that other agents avoid their listings. Having no single agent to turn to for required documentation, additional information and a lack of "personal" service creates tension and, in many cases, additional work for the selling agent. Work that is typically handled by a listing agent. Worse yet, some "limited service" and "flat fee services" provide some of the necessary forms and advice yet, leave their completion to the homeowner. This could create additional liability for both the home seller and the agent who represents a potential buyer. This, in itself, requires thorough consideration by all parties involved. Burdening a potential buyer and agent with additional, and unnecessary liability is something that any responsible broker will surely not allow.

Another basic reason that this type of listing may be avoided is that there are many other homes available. After narrowing potential properties to meet a clients specific needs,. agents may find that they still have far too many to remaining. How might a professional Realtor narrow their search ?

Familiarity - Does the Realtor recognize the listing agent or agency? Does the agent play well with others? Are they responsive knowledgeable, have a reputation for closing on time?
Accessibility - Is the property easy to show? Does it have a lockbox typical to the area or will it require multiple calls, appointment setting and additional effort to schedule a simple showing.
Commission - What will an agent be paid to sell the home? An offer of 1 -2% is certain to influence a decision when there is an exact model match offering 3.5% or more. Listing a property and offering compensation is a job offer. Will you be attracting applicants?
Time on Market - The time on market can be an indicator of many things. Some will be quite obvious and others only evident to an experienced agent. Local agents may know of neighborhood issues, past or current issues with a particular builder, prior physical issues with the property itself a local agent can address these issues. Can you?

Selling your home involves much more than analyzing the cost of listing. You will be offering compensation to a selling agent if you plan on listing on the MLS. want additional "add on" services offered by "DIY" listing providers and the cost will usually go up. Add a full marketing package and???? You may ultimately spend more than you think and end up with no one at your door. Carefully consider all of your options and weigh all of the costs before making any choice. A choice that could cost you much more than you ever imagined.

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Christopher Walker - REO Broker and Realtor with Mission Grove Realty is a proud member of the Active Rain real estate network.

Posted by Christopher Walker California Bank Owned Property on 09/06/2007 04:55 PM

Comments (10)

agent education, client education

Originally posted at: Christopher's Hemet CA Real Estate Blog - Mission Grove Realty: Limited Service - The Right Choice When Listing?

10 Comments on Limited Service - The Right Choice When Listing?

SEP

2007

great post thanks for all the info!

Excellent Post!

It's a Good Life!

Fran Rokicki, CRS, Clubnet~Mentor

Great post. But I'm inclined to say "no comment" for fear of getting in trouble here. You sure like pushing the envelope don't you. It's Christopher "No Fear" Walker Hemet.

Lisa: Ya gotta do what ya gotta do. Everyone has the unalienable right to voice their opinion. It is a wonderful country we live in.;)

tuna?

Is this a sign that I will be swimming with the fishes soon?

SEP

2007

"Commission - What will an agent be paid to sell the home? An offer of 1 -2% is certain to influence a decision when there is an exact model match offering 3.5% or more. Listing a property and offering compensation is a job offer. Will you be attracting applicants?"

Christopher - Using compensation or the lack of what any agent feels is enough compensation as a measuring stick for which homes will be shown a potential buyer is a violation of ethics. I can understand that you may view it as such if you view listing a property as a job offer. That is not how the job is done.

Listing a property is only marketing a home for sale. If you are the listing agent, you have accepted the job offer at the level of compensation agreed upon. The compensation that you offer is through the MLS and it is not a salary, it is co-op. You are sharing your compensation.

If you view a listing as a job offer, your focus in on your reward and you are not placing the clients needs foremost in the relationship. Your job is to either assist a seller sell or assist a buyer to purchase. Your rate of compensation will be determined by the listing agreement and what has been offered in the MLS. You get paid for doing your job not because you accept a job.

JOHN: I have been waiting for someone to bring this up. Job Offer: "An offer of compensation in exchange for services"

Just stating FACT here John. 2 IDENTICAL properties 2 commissions. 1 offers X commission. the other is lower. Which one might sell quicker? Call it what you will bit, it is FACT. I am not implying that a property will or wont sell or that a professional wont show it solely based on "an offer of compensation"

"After narrowing potential properties to meet a clients specific needs,. agents may find that they still have far too many to remaining. How might a professional Realtor narrow their search ? "

AFTER properties have been identified......AFTER Identifying the ones that meet a clients specific needs. 100 properties remain. Will your client want to see all 100 ? If 25 were identical, would throwing them up in the air and selecting the one that landed face up be a more ethical choice?

On the other side of things. Do I believe that, if you had 2 properties, each totally unique. One meets a clients needs perfectly and the other....well, not so much BUT the offer of compensation is MORE. Will someone attempt to "steer" the client and not show the "perfect home"? I would think that most have those "agents" have left the business. For now anyway. Will a professional Realtor do this. I certainly hope not. You are right that we DO serve our client 1st. Not OUR interests. The two DO intertwine.

Thanks for adding to the conversation John. I appreciate your comments. How was the Dr. visit? Hang in there! Keep us posted.

SEP

2007

Found this BLOG doing research

Kudos to Christopher. Bieing a Broker/ Owner in Hawaii has it's obvious challanges and I know the mainland has had to deal with various competetive models more often than we have had to. That being said, most of the time it's the business model malfunction that keeps me away from limited service listings. The most often used self-service model here, is an agency violation waiting to happen and is certainly not a matter of compensation. I just have an issue with being directed to a web site for limted service listings that has a Purchase Contract showing the Seller as "self-represented". Like Grandma said "if it smells bad, it usually is". If it serves the client, then so be it and choices are good, but the uneducated Seller has and will get burned with this method. That's why, in this market at least, the limited service concept has had limited success.

Jeff

Sorry- Here's the spell-check version-Sometimes the Pidgen takes over

Kudos to Christopher. Being a Broker/ Owner in Hawaii has it's obvious challenges and I know the mainland has had to deal with various competitive models more often than we have had to. That being said, most of the time it's the business model malfunction that keeps me away from limited service listings. The most often used self-service model here, is an agency violation waiting to happen and is certainly not a matter of compensation. I just have an issue with being directed to a web site for limited service listings that has a Purchase Contract showing the Seller as "self-represented". Like Grandma said "if it smells bad, it usually is". If it serves the client, then so be it and choices are good, but the uneducated Seller has and will get burned with this method. That's why, in this market at least, the limited service concept has had limited success

Aloha,

Jeff

JAN

2008

My husband and I are thinking of doing a limited service listing. He is an ex Real Estate Agent, so we are familiar with seller contracts and responsibilities. We have several family members that own Real Estate Companies, but not in the city where we are trying to sell. I do not work ,so I will be available to take calls and set showings anytime. We were planning to offer 2.5% commission to a buyer's Agent. We just want to have our home available on the MLS. Would you still advise against a limited service or partial service? Thanks for your advise.

Summer

Well Summer, one of the main considerations would be where you live. What is the market like there and what is customary in the area. A 2.5% commission when banks are offering 3-4 on an REO may be creating unneeded competition for yourself. Not that commissions are, or should be, a motivating factor for an agent but.....if it could be a stumbling block....get rid of it. Getting rid of every possible negative is a must in any market if you want to achieve the highest possible gain in the shortest period of time. This brings us to the issue of marketing, hosting or selling your home...along with a limited service agency. I do not believe that anyone close to a home should attempt to sell it, host an open house, or have much involvement in the actual process. Being too close adds other disadvantages that, in this market, no one wants or needs. Stay as detached as possible and hire a great agent to assist you. Pay them AND....allow them to reciprocate at ABOVE market commission levels in order to add additional traffic. Without the traffic, you will not ever be able to sell and, once they get there, most do not want to be tailed by the property owner. If there is only one thing an Ex Agent should have learned is to stay at arms distance from their own property for many reasons.

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