Sellers Need Options – ROCS Delivers
After 23 years of success in the real estate business, I have earned the right to occasionally weigh in authoritatively on things I think might help the industry as we all try to get along. Realty Operating and Control Services, ROCS, is a company I founded in Lynnwood to help agents from all companies provide better service to their clients with more efficiency and accountability in the process. We do that sometimes by simply providing a good vendor referral or knowledgeable human interface to all the professional marketing and support services available in the real world and on the internet. Most often we do the organizing, Technical, production and administrative tasks that confound entreprenurial types on a regular basis. We also do Continuing Education training and business development workshops designed to reduce errors, aggravation and waste. The belief is that this should all translate into savings that could be passed along.
The Options 1.2.3 program, available through any real estate agent that knows of ROCS, begins with an open discussion about what a good agent can and will do for a homeseller, and what the expectations of both parties should be.
The gist of the Options 1.2.3 program is that if one believes a good marketing plan is helpful in gettng a home sold in this market, perhaps it should be handled by a professional marketing company. The reasons for marketing are varied, but good marketing makes your home stand out from the crowd and expands potential buyer pools. That is accomplished by reaching every possible audience by way of many types of media once your home is properly priced and staged. This can all be very expensive and time consuming when done correctly. It is however, an investment that usually pays off handsomely.
I think it is safe to say that in this market, taking marginal listings falls into the category of high risk investment; and as with any investment, high risk often demands a high rate of return for the investor. In this case, the investor would be the Agent on the hook for the expenses.
But what if the seller picked up some the risk and/or expense? Might not the seller then be entitled to a return on that investment? Shouldn’t the seller reasonably expect the cost of using an agent to go down somewhat if the risk/expense to the agent is lowered?
Agents should be focused on helping to properly price and position the home to beat the competition, negotiating diligently on their clients behalf and supervising the escrow through to closing. With few exceptions, agents who spend their time “marketing your home” are quite frankly out of their league and probably the wrong agent for the times. A professional agent, in all fairness, should probably pay a professional marketing company to handle the marketing considering the return they are anticipating on the investment.
The marketing expense for a home runs anywhere from $1,500 to $3,000 per listing if done properly. Anyone who tells you differently is simply trying to avoid spending the money. Probably because they don’t have it to invest.
The Options 1.2.3 program is about offering Home sellers choices regarding the amount of marketing they believe they need and who is going to make the investment (pay for it) in hopes of getting their money back with a reasonable return. Once that is determined, the opportunity for the return on that investment either as a commission paid or as a portion of the commission saved is a conversation that takes on new meaning.
However, Options the 1.2.3 program is also about choices in the type of representation a seller wants. It might be that a Seller prefers a more consultative approach and doesn’t need a lot of maintenance, especially since the marketing is being handled by a third party and there isn’t any question about what the agent is doing to “Market” the home. This type of representation might then cost somewhat less (say 1%) than a more proactive advocacy. When an agent is actively doing follow up and reporting to the seller on the market and is expanding the buyer pools by networking professionallly and personally to promote your property, this takes time, money and resources and is deserving of a higher level of compensation ( say 2%). If an agent is being proactive and also making the investment by paying a professional third party on the seller’s behalf, then full compensation (say 3%) is a reasonable expectation for the agent to have.
So all these things should be considered and put on the table as an option for a seller to consider when evaluating how much he or she should compensate the agent they wish to hire. The Selling Broker’s commission can also be negotiable, but in this market, to suggest paying an agent with a qualified buyer in tow anything less than market rate (say 3%) is probably going to undermine all your other efforts, especailly if the builder down the road with standing inventory is paying a higher rate and throwing in the (upgraded) kitchen sink as well.
So with Options 1.2.3 you may begin to have a whole new conversation with the agent you wish to hire about what the listing portion of the commission should be. This would be a more honest and frank conversaton about what is being done and by whom and what the expectations and remuneration ought to be for the services being offered.
We’ll see. It’s new. It’s innovative. It flies in the face of some deeply held beliefs about roles and compensation in the real estate sales industry. But I think we need some new options because things have really changed and the marketplace is demanding that we become a bit more. Ask your agent about the ROCS Options 1.2.3 Listing plan. If they don’t know of it, ask them to call us at 425-770-1875 or go to www.jimwarner.com
Please feel free to post a comment at www.Lynnwoodundressed.com
