Once upon a time people received a lot of their news and advertising from something called newspapers – especially for local news and advertising. Printed on paper and hand delivered to everyone who was interested enough to pay for it. Back then, the most common method by far, for advertising and marketing real estate for sale was in the Classified Ads section of the major local newspapers. It was expensive, inefficient and only marginally effective because it was hit or miss for both buyers and sellers. However, that was the primary source for public facing advertising available at the time.
Other marketing activities involved putting a sign in the yard, holding open houses, doing a mailing to the surrounding community, advertising in specialized ‘real estate for sale’ print publications commonly distributed to supermarkets, etc, and telling friends and family.
All of these methods were slow and provided very limited information at sporadic times essentially presenting a moving target for both sellers trying to find buyers and buyers trying to find homes for sale.
The MLS (Multiple Listing Service) used by REALTORS provided the only resource where all properties (at least those listed by a REALTOR) were available to all other REALTORS with a fairly comprehensive list of information available on each property. The MLS system not only allowed every agent to have access to every other agent’s properties listed for sale, it provided the only real method for a seller to get their home out to almost all of the buyers in the market, who would usually end up working with an agent, and was also the most efficient way for buyers to find exactly the home they were looking for (through their agent).
Back then, even the MLS was slow. Property listing information typically had to be filled out on lengthy manual forms then sent into the Local Board of Realtors who would enter it into the MLS system, and after a week or two it would finally appear in the MLS books that were printed and distributed to real estate offices every 1 to 2 weeks. Agents usually had to share a couple of sets of these books in the office and it not only took 1 to 2 weeks for a new listing to appear in the MLS books, it took the same amount of time for properties that were under contract to have their status updated as well. Still, it was by far the most powerful marketing tool that any seller could deploy to get their home exposed to the maximum number of potential buyers and consequently have the best chance to sell it quicker and for more money than if they tried to do it themselves.
Today, there are still private advertising venues, but they almost all exist online now, and using them is still hit or miss. The MLS is still by far the most powerful marketing tool available to sell and buy homes – in fact, even more so than before.
Of course, the MLS has changed drastically since the good ole’ days, as it had to keep up with the massive technology shift created by the arrival of the Internet. And it did so in spite of many agents clinging desperately to the ‘old ways’, convinced that the Internet would ruin everything for them.
The real estate industry and the MLS has flowed with the changes and transformed into a nearly instantaneous, world-wide, mega marketing tool that provides full details on all properties listed, with photos, videos and virtual tours, interactive maps with detailed aerial photo overlays, instant links to school, crime, demographic, transportation, recreation, shopping and other relevant information – with thousands of Web Sites making all of this information available for free to anyone, anywhere, with online access, 24/7.
As a result, nearly 95% of all buyers conduct home searches online in the process of locating a home to buy. REALTORS who have embraced the technological changes are just as valuable to the process as ever. They have more tools to help buyers locate exactly what they are looking for and provide the only access for sellers to get listed in the MLS. And of course agents still have to show the properties in most cases and handle offers and the resulting transactions.
The net result is that the MLS has far eclipsed any other method available for marketing real estate. As soon as a property is listed in the MLS, it is nearly instantly syndicated out to thousands of relevant real estate search Sites. Major national portals like Realtor.com, Trulia & Zillow, and other, along with all the big national franchises Sites, and thousands of smaller brokers and individual agent Sites, some of which rank higher locally in search engines than the ‘big boys’.
This is mostly accomplished through a system called “IDX”, which stands for Internet Data Exchange. It’s a complex system, but essentially automatically shares MLS listing data out to all of the thousands of participating Sites. Nearly all listings are included. There are a few paranoid brokers still refusing to move into the 21st Century, but that number is now a tiny fraction of a percent and over 99.5% of all listings are made available to the public via IDX.
But, as with any data driven system, the GIGO principal applies – Garbage In Garbage Out. When an agent does a poor job of listing a property in the MLS, either through ignorance, laziness or deliberately (more on that in a bit), those errors and omissions, bad or no photos and other problems get pushed out to the world.
A properly executed listing, with accurate, complete and detailed information, comprehensive and well taken photo coverage along with virtual tours and video (when appropriate) can make a huge difference in how many buyers will find the property and then actually want to see it after viewing the listing information and details.
A surprising number of agents don’t know how their own business actually works. They don’t know what IDX is. They don’t understand how properties are actually sold these days. It’s amazing, but unfortunately true, so these agents put very little effort into the most valuable tool they have for their sellers. Then there are some agents that deliberately set their listings up to be difficult for others to find or show because they think that will improve their chances to ‘double dip’ the commission. This is a serious disservice to their sellers, but they will often brag about doing this by telling sellers “I sell 25% of my own listings”, and sellers often think “Oh, he must be good”, when what the agent should actually be telling sellers is “I am going to improve my chance to enrich myself at your expense by making your property difficult for other agents and buyers to find, which will reduce the demand for your property and in turn the price you will get, in order to increase my own chance of finding a buyer first so I can collect both sides of the commission”. On average, a good listing agent that is putting the interests of their seller first, will sell around 5% – 8% of their own listings. Any agent who brags about selling a high percentage of their own listings is simply bragging about how they increase their own commissions by reducing market exposure and competition for their seller’s homes.
Some listing agents really go overboard and require that the buyer pay them a fee, or require that the buyer use a title company that they pick, but that the buyer has to pay for. These tactics are born completely out of greed and are not only harmful to the seller, they are unethical and illegal (a violation of RESPA).
Some listing agents will also take the majority of the commission for themselves and offer a reduced amount to the selling agent (who brings the buyer). This is also a greed based tactic that is harmful to the seller’s interest. Unfortunately, most sellers are completely unaware that this is going on when it happens – or they are aware, but don’t understand the negative impact it has on their sale.
The normal process is for a listing agent to split the commission 50/50. Most brokers also charge both sellers and buyers a fee (commonly in the $295 to $495 range) in addition to the commission, but they can only legally charge that to the customer that they are working with and only if that buyer or seller agrees to it in advance and in writing.
The best listing agents, who truly have their seller’s best interests at heart, may split a market rate commission listing 50/50 with the selling agent, but if they take the listing at a discount to the ‘going’ rate, they will take that discount off of their side of the commission so that the ‘normal’ amount can still be offered to the selling agent. This prevents a ‘discounted’ commission from having a negative effect on the seller’s chance to get the highest and best price for their home.
For example, on a 6% listing, a good listing agent would typically split it 3% to them and 3% to the selling agent. If they discount that to 5%, they would take 2% for themselves and still offer 3% to the selling agent so that the discount has no negative impact on selling agent’s eagerness to show the property.
Just for comparison, our Savvy Seller program pays 100% of the commission to the selling agent – so on a 5% listing, a greedy agent would offer 2% to selling agents, a normal agent would offer 2.5% and a good listing agent would offer 3% to selling agents. With the Savvy Seller program the selling agent would get 5%, putting the seller’s listing at a significant advantage over their competition, for no additional cost to them. And if the seller listed the property with a 3% total commission with the Savvy Seller program, the selling agent would still get the ‘normal’ commission offered, but the seller only has to pay half of the usual total commission amount and still maintain all the benefits of a 6% full service listing.
The most important aspect to getting your home noticed, shown and sold, is properly utilizing the amazing power of the MLS. Nothing else comes close. But there are still other important things that can be done to maximize interest and competition in the property, which equates to faster sales and higher prices. Here are some:
Make your home easy to show. If you still live in the property this will usually involve a bit of a trade-off – what is more convenient for buyers is often less convenient for the seller, but the easier the property is to show, the more it will get shown, and the more it gets shown, the faster and better price it will fetch.
Let the best parts of your home shine. A little decluttering, cleaning and even some paint can do wonders for the presentation of the home. Smells are a big deal too. Pet odors can be a real turn off – fresh air or cookies in the oven can do wonders. If you are home when buyers show up, turn on all the lights. You can make yourself available for questions, but give the buyers plenty of space to look on their own (with their agent) and discuss the property privately. Usually, the longer they are there, the better. In most cases, it’s best to let them look around on their own (you can even step outside for some fresh air), then be available before they leave to answer any questions. If they’re interested, they will usually have some.
First impressions are very important and will taint everything else the buyer sees after that first impression. If you have a yard, try to keep it nice. Make sure the front door is clean and in good repair. After that, the first thing the buyers see (and smell) when they walk in will influence everything else they observe as they look through the home.
If you have pets, especially dogs – even friendly ones, try to keep them away from the buyers. Some people are dog lovers, but not everybody. In fact some people are outright scared of them. Hostile barking dogs, or overly friendly dogs who like to jump all over visitors in delight, especially big dogs, can be all it takes to scare off an otherwise good buyer.
If buyers have a positive experience with your home, it will stand out and they will be willing to pay more for it. At the same time, even minor problems often translate into buyers willing to pay much less than the problems would actually cost to fix. Taking care of the small stuff up front almost always pays back much more than the cost or trouble to handle them in the first place.
Every home is different, and we will give you specific recommendations for your home to help you get the best bang for your buck.