What Is the Cost of Listing? Good Question!

By
Real Estate Agent with Leo Parker Real Estate & Auction

Here's the scenario, you have been working with this seller for a couple of weeks and they have finally decided to list their house with you. You fill out the listing agreement, they sign on the dotted line... now what?

This is the moment you have been waiting for and now it is time to advertise. Maybe you are wondering what exactly is it going to cost me to list this house? I don't remember learning this during my Real Estate classes... First thing to do is ask up front when you sign on with a Brokerage- what exactly is it the company covers on the advertising and what do I have to provide myself? This is crucial because all of the other answers of this question depend on the first. What is my Broker going to provide? For example, starting out at my company we get a smaller portion of the split but the company pays for most of the yard & street signs, newspaper advertising, talking house equipment, virtual tours and they put it on our website. Later, when you reach a particular volume of sales, you can choose to get a larger portion of the split & you provide your own signs.

Let's look at some highlights of the things needed for selling the house you just listed...

  1. YOUR TIME. This is the most expensive part of listing a property. You can't just stick a sign in the yard and be done with it. You need to take measurements of the home, take pictures (good ones- don't get shots of toilets with seats up), make brochures, put signs out, place your listing in the MLS, write ads, tell people about it, etc., etc. Open houses alone can take up 3-4 hours of an afternoon. Follow up on showings and call your client weekly to update them. If the house has been shown, get the follow up and call your seller before they have to call you to find out how it went. This is an area I think people overlook. Most people go to a job, clock in and they get paid for all of the time they are working. For us, this just isn't the case. We spend time checking out the property, taking pictures, showing, doing open houses, writing ads, etc. but unless we get to close our time is essetially free. If they decide to go with another company or agent because they think someone else can sell it faster, better, cheaper then all of the time and money you have invested is gone. Maybe they have a larger property that is going to take longer to sell but think that you should have already been able to despite the slow market... This can be discouraging sometimes, especially when so many people are not educated as to the true cost of selling. They don't think you have lost anything if they go somewhere else because it didn't cost them anything.

  2. Signs, lots of signs. This may vary in some areas, but in the area I work in... larger, sleek signs get us calls. Branding ourselves with our signs gets the company recognition as well as gets your name out. People have the perception that you are successful when they see your signs everywhere. It also makes it much easier for buyers and agents to find the house you are selling if there is a sign at the end of the road pointing them in the right direction. I cringe at the thought of how many times I have had trouble finding a property for lack of signage. Signs vary in pricing. The ones we use are typically $65-$100 for yard signs and $15-20 for road signs and about $10-12 for rider signs.

  3. MLS, Virtual Tour & Realtor.com fees- This is an important tool to get your listing out nationwide. Check with your local Realtor Association for what the cost is for this. I also have an agent website for additional exposure and have a monthly fee for it. There are some free ones available, but I haven't been as happy with the quality of those...but something is better than nothing. Check with your brokerage to be sure they allow their agents to have their own website before investing in it. It is time consuming but worth the effort.

  4. Newspaper, Homes magazines, flyers, newsletters,etc. (print advertising) Okay, it is a known fact where I live that many more homes are sold by the MLS and Internet advertising than by print advertising. Probably 9 out of 10. There are however, still some that check out the papers and magazines every week. Another reason I advertise here is simply CUSTOMER SERVICE. 99.9% of my clients want to see THEIR home in print advertising as well as Internet. Again, this is an area that price will vary depending on the different printing agencies you may have to work with. It can be expensive if you do a large ad, but some papers in my area have 2x2 ads for about $50-$60 for an ad or a small ad no picture may run for $65 for 13 weeks. The larger papers do tend to cost quite a bit more. Depends on the paper or home magazine. I am fortunate that my company provides a full page ad with new listings in our local paper every week as well as a Home Magazine that is distributed to several large counties. I also make color flyers to advertise my listings. I put them in boxes in front of the houses, at local businesses if I can and in the office lobby. I also have a newspaper rack at a local, popular restaurant and have a monthly newsletter with my listings and tips for buyers and sellers in it. It is just another way to advertise the listings I have. I also send these out to those in my database that have subscribed to it.

  5. Open houses- I always provide some kind of light refreshments but nothing elaborate. Simple is usually better and is more cost effective. It is however, not free. This also involves typically 3-4 hours out of your day, not to mention preparation time. I also have flags that I purchased at my Realtor's Association store for $16. I put them in the yard on Open House day and it gets attention.

  6. I look for places I can advertise on the Internet. Craigslist is free and it is surprising how many people look there. Even if you don't get a buyer from it, you may get leads for other business. I also invest in online flyers. You can get some for free up to a certain volume but I just subscribe to a package so that I can get my ads pushed out to more websites than I can do with the free ones. Prices vary from $10 per month, $5 per ad all the way up to $50. There are all kinds of ad-ons you can get for advertising on certain sites or to have a "drip" campaign to keep your ad up front to the consumers. My listings go on my company website, my personal website, Realtor.com, Truila, and dozens of sites thru the online ad companies I subscribe to.  The more places you can place your ads, the more people will see them. It certainly involves time to create your ads and to publish them on the internet, but it is well worth the effort.

  7. Closing gifts. If you work hard and you and your seller are patient, chances are you will get to close! I like to give a gift to my sellers after closing. This cost is up to you. Good suggestions are gift cards for dinner (who wants to cook while moving!), Building supply company gift cards, etc. There are some good websites such as www.colorforrealestate.com that has good closing gift sets. Make it personal and keep in mind each clients personal likes, taste and situations. If they just bought a brand new construction, they may not need to go to Lowe's, etc.

  8. Last but not least... Be a Realtor for life! Don't let the relationship end with the closing. Send birthday, Easter, Thanksgiving, Happy 4th, Christmas cards... you get the picture! Call and check on them. They may remember someone who needs you while you're talking to them. They are a key to your future success and the reason you are where you are.

     

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Rainer
16,549
Tyghre Collentine
Coldwell Banker Burnet - Minneapolis, MN
Great post!  Wow, I thought buyers were a lot of work, ha, I guess they both are!
Nov 07, 2007 07:22 AM #16
Rainer
27,790
Melissa Wagner
Leo Parker Real Estate & Auction - Woodbury, TN

Glad you liked it Vickie!

Yes Tyghre, buyers and sellers are both a lot of work! :) Thanks for reading!

Nov 24, 2007 04:51 PM #17
Rainmaker
202,261
Marcie Purcell
Better Homes and Garden Real Estate Cassidon Realty - Quakertown, PA
Realtor, Bucks & Montgomery Co PA

Melissa,

This is a wonderful for break down of what we actually do for sellers. I think in this market we need to keep reminding them that we are doing the work but do not always see the response of a sale.

 

Nov 25, 2007 02:41 AM #18
Rainer
27,790
Melissa Wagner
Leo Parker Real Estate & Auction - Woodbury, TN
You're right Marcie! I think it is a good idea to educate sellers about the work that goes into it. Most of the time, they really don't know what is going on in the background.
Nov 29, 2007 01:04 PM #19
Rainmaker
90,144
Dee Neal
Palmer House Properties - Alpharetta, GA
Atlanta Area Real Estate
very good list. i bookmarked it.
Dec 26, 2007 05:26 AM #20
Rainmaker
101,823
Ray Nellum
Envision Real Estate Group, LLC. - Fort Smith, AR
Fort Smith Real Estate
Melissa, being a Realtor for Life is very important, and it get's very difficult to actually measure the cost of a listing.
Feb 02, 2008 01:11 AM #21
Rainer
53,243
Susan Jackowski
Lake Norman NC - Mooresville, NC
Lake Norman NC & Hudson Valley NY
Great blog.  A question if I may.  How do you change you properties advertised on the websites, individual?  I was wondering if there was a program where you could make changes in all of the websites.  Currently I have an assistant do it.  It does get complicated cause like you we are on every free website we can find along with the major pay ones.  If you have any suggestions.  Thank you
Feb 07, 2008 07:29 PM #22
Rainmaker
4,432,217
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel
Good post. There are some agents who do not have any expenses when they get a listing . They just put it in MLS and wait. I have seen houses where they do not have any brochures in the house. However, things have changed in this market.
Feb 07, 2008 08:56 PM #23
Rainer
62,465
Bart Whitmore
Keller Williams- Louisville - Louisville, KY
Real Estate Agent
Also add the cost of gas for all the running around keeps increasing everyday
Mar 10, 2008 11:06 AM #24
Rainer
29,614
Andy Laughlin
ConnectRealty.com - Bellingham, WA
Hey thanks for the post!! I haven't yet sold a home but that atleast gives me an idea.. Thanks again and have a great day!!
Apr 27, 2008 10:51 AM #25
Rainmaker
180,751
DeAndrea "Dee Dee" Jones
Home Buyers Marketing II, Inc. - Manassas Park, VA
The NorthernVARealEstateLady & DMVRealEstateChick
Lately the cost has outweighed the sale.  Some of my higher price listings I cant pay someone to buy.  The marketing, ads, open houses, etc... have to bring you buyer leads in the end to be worth it.
Apr 27, 2008 11:46 AM #26
Rainmaker
166,636
Lee Davenport
Sandy Springs, GA
Learn With Lee: Real Estate Coaching & Consulting

Melissa, what system/database do you use to keep track of all of this?  Thanks!

Sep 10, 2008 02:48 PM #27
Rainmaker
647,599
Team Honeycutt
Allen Tate - Concord, NC

Great post. Sellers need to realize all of the steps we take. It is not just putting it in MLS.

Sep 25, 2008 09:22 AM #28
Rainmaker
647,599
Team Honeycutt
Allen Tate - Concord, NC

It is so easy to get caught up in the marketing world and not look at each things return.  Thanks for the info

Sep 30, 2008 03:08 AM #29
Rainer
45,822
Thomas McGiveron
Long Island Real Estate Market: Douglas Elliman - Medford, NY
Thomas McGiveron Lic. R.E. Broker Associate

I think client testimonials say it all.

Sep 30, 2008 03:16 PM #30
Rainmaker
647,599
Team Honeycutt
Allen Tate - Concord, NC

Great blog,  the fun part is sending things after the closing and getting responses back of disbelief that you even remember their names.  You will make a customer for life

Oct 31, 2008 08:14 AM #31
Rainer
13,713
Ronda Jones
Ricki Eichler Real Estate, LLC - Mico, TX
Realtor, Mico, TX

Melissa, great post - I bookmarked it too :)

"I also invest in online flyers. You can get some for free up to a certain volume but I just subscribe to a package so that I can get my ads pushed out to more websites than I can do with the free ones. Prices vary from $10 per month, $5 per ad all the way up to $50. There are all kinds of ad-ons you can get for advertising on certain sites or to have a "drip" campaign to keep your ad up front to the consumers. My listings go on my company website, my personal website, Realtor.com, Truila, and dozens of sites thru the online ad companies I subscribe to"

Would you mind sharing what site you use for online flyers and for the advertisting ad-ons? I've been spending the last few days looking at different options but the choices and what they offer are mind boggling!

Dec 19, 2008 02:56 AM #32
Rainer
42,600
Becky Brand
Shorewest Realtors - Oconomowoc, WI

Melissa - great post.  And to think, except for the closing gift and follow up costs - all these costs are paid by you whether you sell the house or not.  Great post to review if an agent is on the fence about accepting a listing from a non-motivated, priced too high seller.

Jan 02, 2009 01:37 PM #33
Rainmaker
798,159
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Melissa, yes there are a lot of things we as realtors do to list a home.  That is our job, and we should try and market the home any and every way possible, while still trying to limit our expenses.  We can only hope that all our listings sell, and the sooner the better.

Feb 07, 2009 06:19 PM #34
Rainmaker
191,758
Christa Ross
RE/MAX Select Realty - REALTOR and Green Homes Specialist - Pittsburgh, PA
Helping you buy and sell Pittsburgh's Best Homes

Here is my formula...

Figure out how long it will take you to enter into the MLS, post to websites, do the paperwork, meet with the client, set up the home, add the lockbox, get the sign in, etc... then multiply if by your hourly rate. That's the cost for your time.

Then figure out your out of pocket expenses for syndication, advertising, signs, ect... that's your out of pocket.

The figure out how much all your desk fees, real estate dues and subscriptions services that allow you to do your job are. Divide that by how many listings you have a year on average.

Add those together and that is the true cost of your listing.

Dec 14, 2009 07:50 AM #35
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Melissa Wagner

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