Link to Listing Homes for Sale - Part 1 of a series
Link to Listing Homes for Sale - Part 2 of a series
Link to Listing Homes for Sale - Part 3 of a series
Link to Listing Homes for Sale - Part 4 of a series
This series focuses on effective and efficient methods of meeting with Sellers who want to sell Phoenix area Homes and Real Estate, determining whether there is a good fit between the Seller and the prospective Listing Broker, and the technology that is available to streamline the process.
Professional service fees, activation date of the listing in the MLS, and what needs to take place between now and when the doors open to the public
So now it's decision time:
- Does the Seller believe that the marketing plan offered by the Listing Broker meets their needs?
- Is the Seller willing to list the home for sale at a price that is supported by the current market?
- Is the Seller agreeable to the professional services fee?
If those three stars are in alignment, you have a great new listing!
So - how does the discussion go?
Mr & Mrs Seller - As I mentioned at the beginning of our discussion, we need to cover three key areas:
- First - my marketing plan. We've just reviewed that and you tell me you believe I can effectively market and sell your home.
- Next - We need to discuss List Price. We've covered that so we can move to the next step, which is:
- Professional service fees, activation date of the listing in the MLS, and what needs to take place between now and when the doors open to the public.
Either:
- Option A - The Sellers Agreed to a List Price supported by Market Data
- Option B - The Sellers DID NOT AGREE to a List Price supported by Market Data
Option A - The Sellers Agreed to a List Price supported by Market Data
Mr & Mrs Seller - based the List Price here is an estimated Net Sheet that includes my x% professional service fee - which is split between me and the Buyer's Broker - w% to my Broker and y% to the Buyer Broker in the MLS. Variables that may change this number include any prepayment penalties on your current financing, and HOA transfer fees.
Tony - We're not comfortable with the commission amount.
I can increase it if you prefer! :-)
No - Another agent told us they would help us for 1% less than your fee. We want you to lower your commission.
I understand. Everyone wants the best deal possible. Let me ask you a question. Did the other agent who has a different pricing model offer the same marketing model that I do?
Well....no.
Then we aren't really talking apples to apples here, are we. In fact, if you asked the other agent to help you and do all the things included with my marketing model, don't you think the commission they would ask for might be different?
It could be.....
Then, quite frankly, you have a decision to make. You can list your home with me given that you've already agreed you believe our marketing model will get your home sold for the most amount of money, in the least amount of time, with the least amount of inconvenience for you - or you can list with the other agent for a different commission amount, and let them help you. I've found focusing on the bottom line, rather than the commission line, is the most relevant number - wouldn't you agree?
Yes.
Then let's review the listing documents.......
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Option B - The Sellers DID NOT AGREE to a List Price supported by Market Data
Mr & Mrs Seller - based the List Price you want here is an estimated Net Sheet that includes my x% professional service fee - which is split between me and the Buyer's Broker - w% to my Broker and y% to the Buyer Broker in the MLS. Variables that may change this number include any prepayment penalties on your current financing, and HOA transfer fees. Please note that there is an upfront non-refundable retainer in the amount of $x,xxx that will be credited back to you at close of escrow.
Tony - We're not comfortable with the commission amount or the upfront retainer.
I can increase it if you prefer! :-)
No - Another agent told us they would help us for 1% less than your fee. We want you to lower your commission, and we don't want to pay any upfront fee.
I understand. Everyone wants the best deal possible. Let me ask you a question. Did the other agent who has a different pricing model offer the same marketing model that I do?
Well....no.
Then we aren't really talking apples to apples here, are we. In fact, if you asked the other agent to help you and do all the things included with my marketing model, don't you think the commission they would ask for might be different?
It could be.....
Then, quite frankly, you have a decision to make. You can list your home with me given that you've already agreed you believe our marketing model will get your home sold for the most amount of money, in the least amount of time, with the least amount of inconvenience for you - or you can list with the other agent for a different commission amount, and let them help you. I've found focusing on the bottom line, rather than the commission line, is the most relevant number - wouldn't you agree?
Yes.
Regarding the upfront fee - this is purely a way of making sure we all have a vested interest in getting the property sold. Given that the initial List Price is significantly above what the market supports, and given there is no way to insist that you lower the price at a future date, the upfront fee helps offset my upfront expenses in a situation where the risk of failing to sell is significant. I can waive the upfront fee, but only if the property is listed at a price supported by the market.
Or - we can agree to go our separate ways. I would like to help you get your home sold - but frankly I'm just not in the business of taking over-priced listings at significant out-of-pocket expense only to have them languish on the market until they expire - causing you a lot of grief and costing me a lot of money! Can you understand why that is a prudent business practice?
Yes. So you're saying that if we list at a price the market supports then there is no upfront fee, but if we want to list it at the higher price we've got some skin in the game?
I couldn't have said better myself! We have three options:
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Option A - List at a price supported by the market and pay no upfront fee
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Option B - List at a higher price and pay the upfront fee
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Option C - Agree to go our separate ways
Any one of those is OK with me. Which would you prefer?
Option A
Then let's review the listing documents.......
Option B
Then let's review the listing documents.......
Option C
I wish you all the best with the sale of your home!
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The end result of this discussion MUST be full agreement between Seller and Listing Broker regarding what the initial List Price, pricing strategy and compensation will be.
Don't be afraid to walk away from an over-priced listing that will cost you time, effort, money and grief!
If you are moving forward with the Listing, explain to the Seller what needs to be done to get the property ready for showtime, and stipulate a specific MLS activation date in the Listing Agreement that allows all the pre-showtime activities to be completed prior to activation. You want the property to show as well as it can to the first group of Buyers to walk in the door.
UPDATED: See Getting Ready for Showtime! Part 1 of a series
If you are considering selling a home or real estate in the Phoenix area you owe it to yourself to talk with Haven Express at Keller Williams Realty Professional Partners to determine whether Tony Marriott is the best real estate Broker in the Phoenix and Scottsdale metropolitan area to help you with the sale of your home!
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