Real Estate Gimmicks
Revised and republished from: http://mytwincitiesrealestate.blogspot.com/2015/11/real-estate-gimmicks.html
How to Avoid Real Estate Gimmicks
The best line of defense against falling for a scam is knowing that the scam is out there. Now just because something is a gimmick doesn't make it a scam, but it is still important to understand what you're getting yourself into.
Good advertising is good for sales. It's marketing 101 really. But when it comes to real estate advertising, who is being sold? Let's look at some programs (a.k.a. gimmicks) that are presented to home sellers.
GUARANTEED SALE in XX DAYS: a.k.a. Guaranteed price reduction that you must pre-approve them to do when you list and the reductions happen quickly - like every week or two and they are often large - like 10-20%.
So, if you really do take a hard look at the data real estate agents have and you are removed from the history you have with your house, you will know if it's possible for you home to sell in your timeframe and the most probable price and that information is more important than any guarantee.
GUARANTEED SALE or WE BUY IT: a.k.a. First off, the “guaranteed sale” will not be at the price you expect. The Realtor who markets this type of plan is backed by investors who will purchase your home at a wholesale discounted price. Meaning that you may get $.60 to $.70 on the dollar. That puts a different spin on it, doesn’t it? I mean, isn’t the phrase “acceptable price” extremely ambiguous. Acceptable to whom? The truth is that the “acceptable price” will be determined by the real estate agent, and it will be a price that is WAY below market value. If you do not agree to the “acceptable price” then you do not qualify for the guaranteed program. Most sellers that have looked at the market data know the "we buy it" price is BELOW the market value so they don't agree to the program and and therefore they don’t ever buy homes. Many of the so called “guru” real estate trainers around the country who recommend this marketing method tell agents how to structure their guarantee so that no informed person would even want to take the “guarantee.”
“I HAVE A BUYER FOR YOUR HOME” a.k.a. If you would just talk to me I would love to list your house and then if I market it right, I will have a buyer.
OPEN HOUSES EVERY [SUNDAY]: a.k.a. Buyer Bait. Listing Bait. The agent is HOPING that the neighbors come by so they can recruit future listings. They are also hoping that potential buyers without agents stop by so they can pick up some new buyer leads. If one likes the house (according to the latest survey, less that 10% do) and they want to buy it, that's a double bonus as they get paid on both sides of the deal!
Let's look at some offers (a.k.a. gimmicks) that are presented to home buyers.
LOVE YOUR HOME GUARANTEED: a.k.a. If you don't love it, we will sell it for you and if find you another home to buy through us. And while we may waive our sale side of the professional fee (commission), you will still need to pay the buyer commission and we will need to hold Open Houses (see above).
MY SERVICES ARE FREE TO THE BUYER: Well, almost, a lot of the time. The buyer representation contract almost ALWAYS include a retainer fee (often wrongly listed as an admin fee) and there is a possibility the seller doesn't agree to pay the buyer's agent's commission (though in most cases they do). 83% of agents are independent contractors which means they are self-employed/own their own business. How would they stay in business if their services were free? Ask them to explain how they get paid.
If you’ve considered calling on a “Guarantee” like these, be aware. Do you want to work with a residential real estate firm who is selling on gimmicks instead of truth and value from the start?
So, are there any guarantees you SHOULD take?
This is probably the biggest transaction you will have in your life. Trust is a vital part of an agent's value. The guarantee that you should be looking for is honest advice - even when the truth is hard. And a guarantee that they will follow up as promised. Agents promising the world (high sale prices, fast sales, hot deals, etc) without data and plan to support the promise most likely are on the "sign now, explain later" plan. Meaning they will be asking for price reductions or back pedaling when things don't go as planned. Take the time to let your agent educate you to make a good decision instead of looking for the best gimmick. Review the agent's marketing plan. Find an agent that asks a lot of questions and really understands your situation and goals. You will thank yourself!
Other articles you may enjoy:
- Do you need an agent in a "Seller's Market?"
- Home Seller FAQs
- How can you correctly price your home for sale?
- Preparing To Sell
- Feng Shui 101
- Things that do NOT factor into home values
- 10 things that may Negatively affect your Home’s Value
- House Value Opinion: Homeowner vs The Appraiser
- Why are all those home search sites free?
