Question Details

Samantha, Home Seller in Chicago, IL

We have obviously made some realtors mad at us - for 1. listing flat fee mls as our realtors cannot stand

Asked by Samantha, Chicago, IL Wed Aug 20, 2008

that arrangement even though we are offering a hearty 3.5% buyer's agent commission. 2. dropping our realtor albeit quite nicely with a generous thank you gift and 3. questioning pricing strategies of a prominent neighborhood realtor to a neighbor who then told the realtor and we have felt blackballed ever since - SO, ultimately here is the problem: Beautiful home in beautiful condition very fairly priced (we were told this by our realtor before we decided to go it alone) AND 4 homes within the past week got contracts on them in our price range (within 30k) AND we did not get one showing request as we sit by owner on flat fee mls with a buyer's agent commission specified! Not one call. There is only one agency in our town and that is the agency that we had so it is no mystery why we are not getting showings - what can we do?

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11
Samatha, it does sound like you've gotten on the sore side of some Realtor, and in my opinion, for no good reason.

But it's very difficult for her to poison the minds of all the Realtors in the area. As long as you're on the MLS, your listing is available to all of the agents in northern Illinois. If your home suits the needs of agents seeking property on the MLS, it's unlikely that all of them have spoken with this vindictive agent, and even less likely that they would avoid your listing due to some of her unkind words.

If 4 homes in the past week have gotten showings and ultimately offers, while you sit in the corner unvisited, I'd suggest it has more to do with price, description, photos or some other issue. If you're offering 3.5% commission (a very hefty co-op commission in the Chicagoland area), agents should be showing your property. Since they're not, I have to presume that there's some other issue.

Fairly priced, in today's market doesn't always mean "attractively" priced. Were the 4 homes that sold all priced below you?? Look at your listing as objectively as possible... what else is available to the average buyer, and why are they choosing other properties over yours?

I don't believe it's because of one back-biting agent.
2 votes Thank Flag Link Wed Aug 20, 2008
Alan May, Real Estate Pro in 60201
MVP'08
Contact
I tried to make it clear that I had showings when it was priced 20k, 40k and even 80k above this price! I not only had showings but I had second looks and very serious people who didn't wind up buying it but were serious about it. Now, it is 20k less than when it was with the realtor
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You had showings, and second looks... but I have to contend that if they didn't wind up buying it, there was something about the property that didn't click.

Clearly your marketing was working (you can call it "back scratching" if you want), because you were getting people walking through your house. But "something" caused them to 1) not buy your home 2) purchase something else. This is the "some other issue" that I'm talking about.

It could be pricing... or it could be location... it could be that the decorating that you feel is fantastic, and paid a designer huge bucks for, is being perceived by the public as awful... I don't know, 'cause I'm not in your market, and haven't seen it.

All I'm telling you is that it's "doubtful" that the lack of showings that you're experiencing now, is due to a vast conspiracy of all the agents in your area to blacklist your property, at the expense of their clients interests and their own potential pocketbooks.
1 vote Thank Flag Link Thu Aug 21, 2008
Alan May, Real Estate Pro in 60201
MVP'08
Contact
Samantha, the longer a home is on , the showings slow down. The big crowd that was looking has seen it and moved on. Now you are just getting the new to the market folks. That is why your showings have come to a stop . Generally when a home gets a lot of showings and now offers it is because buyers feel it is too expensive.
1 vote Thank Flag Link Wed Aug 20, 2008
I wanted to respond to the question where the user asked if I keep my word and did I break a contract or use a realtor without signing a contract etc - my word is as good as gold and it always has been. I had a realtor and an agreement that I adhered too until the agreement expired. Once it expired I decided to list it on my own using flat fee mls - that is done through a realtor (the only way you can get on the mls) and with an agreement that when a buyer comes with a realtor I will pay a commission. I have always honored my agreements and I cannot understand how that reader interpreted otherwise. I am no longer under contract with the initial realtor because my contract expired, I re-signed with that original realtor over and over and the house didn't sell. This time I decided to try something new. As for price, people keep writing back and saying that it must not be priced correctly. I tried to make it clear that I had showings when it was priced 20k, 40k and even 80k above this price! I not only had showings but I had second looks and very serious people who didn't wind up buying it but were serious about it. Now, it is 20k less than when it was with the realtor last and now it is in a whole different price range and other houses have gotten contracts during the past week and I didn't get a phone call... it is on the mls just as it was before so you would think that realtors are letting their clients know about my home as they are showing them those houses that have interested them so much, prior to the people putting a contract on those four homes to which I refer - wouldn't it be standard practice for each of those realtors to acquaint their buyers with the few homes on the market other than that one and likely a showing would result? Showings were good before my contract with this realtor expired (they were decent but he didn't show the house once himself). Now no showings? How do you really justify that? You say marketing (I know, typical agent speak - where are you marketing your home beyond this) but you know what, the ad in the local paper (the only marketing that my agent did that I haven't done) didn't reel anyone in - it was the agents, working together (you scratch my back and I 'll scratch yours) that brought the potential buyers to my home, other realtors would want to expose my home to their buyers because the buyer might benefit AND because that realtor knows that my former realtor would reciprocate. It isn't marketing. The MLS, realtor.com, Zillow, google and yahoo and 90 total websites have my home on it as well as craigslist. My photos look beautiful and very similar to those of my former agent, my description is flawless. I know realtors, because it is their livelihood would like to attribute this lull to something that I am not doing but the absolute only thing I am not doing is I am not putting it in my local paper as my realtor received no calls from that venue.
1 vote Thank Flag Link Wed Aug 20, 2008
Samantha

Please read the thread attached to the link below. It may be of some interest to you. Also, hopefully you have a written release from your old brokerage, and not just an agreement that your agent will no longer market your house. In other words make sure you are not bound by any protection period rules. If you are bound by that clause, even if you find a buyer on your own, it could get a little problematic in proving it.

http://www.trulia.com/voices/Home_Selling/FSBO_info_-50817--oldest
1 vote Thank Flag Link Wed Aug 20, 2008
Samantha
You have some very good points in your post, however I think you are confused between commissions and marketing.
First, if a listing is priced and marketed properly it will receive showings. The rule of thumb is 10-12 showings during the two weeks on the market or a price adjustment is in order. The problem that most sellers have with limited service or MLS entry only brokers is that they are not receiving the market data AND the proper interpretation of the data to establish the right price.

I research my MLS each quarter and conduct comparisons of Full Service, Limited Service, and Discount Brokers and the trends remain almost identical:
1. Full service listings sell closest to asking price... last quarter they sold for 99.6% of asking within 30 days.
2. Full service listings sell faster - listings that are sold by limited or entry only brokers take longer to sell - an average of 115 days,
3. The biggest problem that limited or MLS entry only brokers have is that their listings do not sell, period. We call it Expiring. Listings fail to sell 150% MORE often.

To summarize, unless you have money to burn, time to kill, and don't really need to move, using a full service broker is the only way to get your home sold.

So, back to your commission question: Commission is important, but it is only one factor. The key concern for Realtors and their buyers is VALUE. The homes offering the best value go first.
As a listing sits on the market, it loses value. On average they sale for 93.67% of asking price at 120 days on market (DOM).

One of the considerations is that when you look at the total number of listings sold by MLS Entry only and Limited Service, it is a very small percentage. During the last quarter it was 271 listings sold by Full Service compared to 5.

The best way to figure out what the true picture is like is to look at the market. And you have done that. Remember, the best deals go first. And buyers need to know about them. A typical full service Realtor has an array of marketing tools to get maximum exposure for their listings. A limited service or MLS Entry only broker puts it in fewer places (like MLS and Realtor.com, maybe a few other sites). Remember, you get what you pay for.

If your goal is to get your home sold, then I would recommend that if you do not see showings that you consider two options:
Lower your price gradually until it sells (knowing that very soon people will wonder "what's wrong with that home, it has not sold")
Or consult with a couple of Realtors and ask them for their opinion. Whatever you are saving in commission you are more than losing in market time and value.

Hope that this is helpful.
1 vote Thank Flag Link Wed Aug 20, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Hi Samantha,

Agents who are Realtors (belonging to the National Association of Realtors) have taken an oath to a stringent code of ethics. That code obligates us to show ANY property to our buyer clients that they want to see or that we know may be the right home for them. That being said, many agents will hesitate to show an unrepresented property or put it off until other possibilities are exhausted. This is not "blackballing" as much as agents having difficult experiences dealing with sellers directly rather than with a trained agent. We know that another agent knows the process and the paperwork and that things should go smoothly. In dealing with a For Sale By Owner or seller who has only used an agent to list the property in the MLS and is not otherwise represented, the buyer's agent can end up frustrated and doing extra work (they should NEVER, however, explain or advise the seller in any way). I say all this just to give you some insight into the thought process of some agents.

I have sold several homes to buyers that were in the MLS or were FSBO and dealt with the sellers directly with no problem at all. Honestly, as long as my buyer gets the house they want, and I get paid, I don't mind the extra hassle! And kudos to you for a generous buyer agent commission (few people realize how hard we work or how much that commission gets chopped up before it gets to us).
1 vote Thank Flag Link Wed Aug 20, 2008
Samantha,
I'm the type that would go at it with out a Realtor...that is, if it was a sellers market which it is not.

If your last Realtor did not work out then you should interview 3 new ones and choose the one that has the best plan of attack.

I have to agree with Elvis about the decorating thing. As an Investor, I have been through God knows how many properties and it never cease's to amaze me what people think is "cute" or "warm" looking actually looks hidious. In today's market I do not know why these sellers are not "LISTENING" to their Realtors advice about staging their home properly.

My best advice is to go look at all the homes in your neighborhood that are for sale and see how the homes look like inside and get some ideas.

As for a vast conspiracy.....My experiance here in the Chicagoland area is that they are all very worried about keeping a good reputation. In the boom years, everyone and their brother was getting a licence to sell realestate. Now those folks are leaving the industry left and right and what is left are the professionals that have been in the game for a very long time.

Good luck!


Elvis! You Rock!
0 votes Thank Flag Link Sat Sep 13, 2008
Hi again Samantha,

I think that JR made a valid point about fewer and fewer showings the longer a home is on the market. It is statistically true that a home gets the most showings the first month it is on the market.

Also, Maria was pretty hard on you about the agreement. But I have to say that I had also misinterpreted that you had broken your agreement with your listing agent when I first read your question. Once that agreement expires, of course you are free to do whatever you want!

In my market, we often hear complaints from sellers that "you didn't show my house once yourself" even if it is shown many many times by other agents. I don't know about your market, but we have a huge number of agents here working with buyers, so it is often unlikely that I will show my own listing. My job as a listing agent is to get your house sold, and I cooperate with 1300+ agents to make that happen. It doesn't matter that your agent didn't show the house personally (believe me, we all love to show our own listings, but realistically it just doesn't always happen that one of the buyers I am working with is right for my listings).

Cooperating with other agents doesn't mean "I scratch your back, you scratch mine." It means we have a professional arrangement (MLS) to cooperate in showing each others' listings and providing compensation. Your flat rate company falls into that cooperative arrangement.

Statistically, agents are more successful in selling homes than owners are, and most owners do engage a full service agent after a period of trying it on their own. Why is this? Because we are professionals who handle real estate transactions every day and are trained in all the aspects of the sale, disclosures, and transaction. There are a few bad apples in the Realtor basket, but for the most part we are hard-working, honest people who genuinely care about the best interest of our clients --often over "making the sale."

It sounds as if you feel burned by agents -- your previous agent as well as all those who aren't showing your home. To be straightforward, without knowing a thing about your area and your property, if a home hasn't sold in the amount of time you have been trying, with the agent and without, something about the price or the property needs to be addressed. And you are now stale on the market. And buyers are often more comfortable putting an offer on a house that is listed with a full-service agent. I know you think we are all trying to push you toward using an agent, but we know that the odds are in favor of it selling with an agent representing you. Agents generally get you better price, terms and conditions than you will get yourself making that commission you pay more than worthwhile.

You just have to find one that you really can put your trust in and who will shoot straight with you about what it will REALLY take to sell the house (you are correct, at least in my market, that an ad in the paper isn't it).
0 votes Thank Flag Link Thu Aug 21, 2008
Blackballing is illegal and I seriously doubt any realtor would engage in such activity that would jeopardize their livliehood.
Now, I'm confused about you have a realtor; you don't have a realtor; you had a realtor. Am I to understand that you had signed an Exclusive Seller's Agency Agreement with a realtor and then broke that agreement?
So, does that mean that you are someone who does not honor any agreements or just some agreements?
Could I trust your word? Verbally, or in writing? Do you honor some, most, or all legal contracts?
How would I know which ones?

Perhaps I am misunderstanding the story. Perhaps you just asked a realtor to work for free and then never signed anything before placing your home on the market. Is that it?
If that's the case then all you need to do is to advertise your home in all venues, find and qualify your buyer, write the contract and go to closing.

If 4 homes sold in the past week, sounds like your location is good. How's your price vs. the condition of your home? Is it staged properly? Priced fairly? Where are you getting your buyers? Where are you advertising? 3-5% sounds okay; 6-10% or a big bonus might be hearty. How are you handling showings?
Which centralized showing service are you using? Which kind of lockbox? How long have you been on the market? The first 30 days are the most important to any new listing. Even using a discount broker, you need to work vigorously during the first 30 days.
Remember to be friendly and communicative with any realtors that work your neighborhood as they will have access to buyers that you do not and you want them to bring you the buyers. Also keep in mind that discount brokers and For Sale By Owners cause full service realtors to do 90% of the work when it comes to the contract, negotiating process, loan approval, and closing processes. That's why many realtors would just as soon do business with other realtors; they only have to do their fair share of the work.
This does not mean that they will not show your property to buyers; they will show their buyers any property that meets the buyer's criteria. And they will show the buyer properties that the realtor knows does not meet the buyer's criteria if the buyer wants to see for themself.
0 votes Thank Flag Link Wed Aug 20, 2008
Hi Samantha: I don't know how it works in Chicago, but in NJ, when a home is listed with one of these limited service, flat fee companies, the seller still has the right to sell the home themselves, without paying a commission. Most of these homes still have a "For Sale By Owner" sign in their yards. Realtors are reluctant to show these homes for several reasons. The first being that they are worried if they show your home, that the buyer may contact you directly - hence costing the agent their commission. Another reason is that you do not have an agent working for you and therefore the buyer's agent needs to negotiate directly with you....and end up doing the work that a listing agent would normally do. The agent ends up with the possibilty of coming across as an undisclosed dual agent. You would be better off to list with a full service agent who will really work for you.
0 votes Thank Flag Link Wed Aug 20, 2008
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