Do buyers' realtors avoid showing flat-fee listings, even if the commission offered is 3.0%?

Asked by Dark Horse Construction, Saint Charles, IL Tue Jun 9, 2009

In 17 months, realtors have shown our $1.1M Campton Hills house only five (5) times! It is on the MLS and at http://www.OakHillsCt.com. Is the lack of showings because of realtor bias against flat-fee listings? Or because of this awful market?

Last summer, I sent a postcard mailer to 1,500 local realtors offering 3.5% commission, and generated not one new showing. If we list with a full-service realty, it will have to be with my sister-in-law, who is a CB realtor. But, I see no advantage in listing with her, as she hasn't shown the property either. The other house currently for sale in our subdivision is at $1.7M. My sister-in-law said that our house is priced too low. Any insight would be greatly appreciated!

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Chris Clark, Agent, Saint Charles, IL
Tue Jul 7, 2009
BEST ANSWER
Hello Sheri,

Let me start by saying the home you have for sale looks fantastic! I would not hesitate to show it to any buyer that I was working with in that price range.

I have read all of the answers up to now and I think it's time to take a logical and statistical approach to see what is going on with the market. That is what I see as missing in all of the answers posted so far. I have always been an advocate of staging, but in this market that may or may not help you. The majority of buyers are looking for great deals.

Now to the statistics:
There are currently 107 active listings priced over $900,000 in St. Charles and Geneva. In the last 6 months only 7 have sold. If no other homes in this price point came on the market and the market did not improve, it would take over 7.5 years for all homes to be sold. That is a tremendous amount of inventory!

Here are the stats for the 7 home that have sold in the last 6 months (any agent can pull more specific information if you're interested):
Home 1 - sold for 76% of original list price and was on the market for 194 days
Home 2 - sold for 82% of original list price and was on the market for 397 days
Home 3 - sold for 98.5% of original list price and was on the market for 4 days
Home 4 - sold for 77% of original list price and was on the market for 645 days
Home 5 - sold for 86% of original list price and was on the market for 144 days (what is interesting about this home is that it sold for 69% of the first listing price and had been on the market since late 2007)
Home 6 - sold for 100% of list price for a new construction home in Prairie Lakes
Home 7 - sold for 87% of list price and was on the market for 96 days

As you can see, homes are slowly selling in that price point, and many of them are selling for quite a large discount. I would have no issue with showing your home to a buyer just because it is listed with a flat rate listing company, but you may need a little bit more in this case. My advice would be to identify the listing and selling agents that sell homes in the area in the million dollar range and interview them for the position of marketing your home. They will have the contacts and potential buyers that are looking in that price point. It is not always just a matter of getting a home in the MLS to get it sold. There are some great sales and marketing skills required to list and market a home in this price point. If your sister in law has listed and sold a number of homes in that price range, she may be the agent for the job, if not, you might want to consider someone who regularly works in that price point.

I hope that helps and best of luck in getting your home sold! Feel free to post any additional questions.

Chris Clark
Web Reference:  http://www.clarkhometeam.com
1 vote
Ralph Bredahl, Agent, Sedona, AZ
Sun Jul 5, 2009
I don't see how staging would make any differance. Staging may help when a prospect is in the house but if you have had 5 showings in 17 months you have other problems. Either the home is not being marketed properly and/or it is over priced.
Is the aggravation that you are going through worth it. You are not saving any money if you don't sell it. My advive hire a proffessional Realtor that knows to market a property.
Web Reference:  http://Ralphandtricia.com
1 vote
Anne Traynor, , Bartlett, IL
Sun Jul 5, 2009
Relist the property and have it staged--This is an upscale home and needs to be shown as such..The price is right on..I hate to say it, but bite the bullet and go with CB or Remax..They have some many more connections to get your house sold....I'll bet you have 5 showings in a month and not 17----Good Luck to you!
1 vote
Alan May, Agent, Evanston, IL
Tue Jun 9, 2009
Agents show properties that fit their clients needs. Can you truly imagine that an agent might pass up showing your property (simply because it's flat fee), and passing up on a potential co-op commission of just over $30,000?

Your logic is a bit skewed. Just because your sister-in-law hasn't shown the property doesn't mean that she wouldn't be an excellent listing agent. It's not the job of the listing agent to show your property. That's the job of buyers agents.

The job of the listing agent is to get your home the most marketing and exposure, and make sure all the buyer's agents know everything about the property.

If your property isn't being shown, it has more to do with the market and/or your price. And unfortunately, as the owner, you're not in a position to be objective. The fact that another home is sitting in your subdivision, unsold, at $1,700,000 has no bearing. What is important is how many million dollar plus homes are selling and have sold in the last 3 months... and if any have sold, how do they TRULY compare to yours.
1 vote
Daniel, , Baton Rouge, LA
Wed Aug 26, 2009
perhaps you sent your post card to 1500 realtors with out buyers!

offer 4% to the buyers agent on your MLS listing, you will get showings!

and yes, Im gonna show any property to which i will get a paycheck!
0 votes
Angela Sarge…, Agent, Austin, TX
Tue Aug 25, 2009
Hi Sheri,
You really need to consider what you are NOT getting for your flat fee listing. With reduced fee listings, you very often could call it "reduced service". Honestly, selling your home is what you are after.

I say cudos to your sister-in-law for not showing your home if she truly does not have a buyer for that particular home. I've seen agents "show a home" with the interest solely of "getting the listing". It sounds like she may be buys selling homes! That is a really good thing!

We all, in every market, have certain buyers looking for a particular size, style and price of home. If your home fit the criteria of one of my buyers, I would surely show it. I don't care who you have it listed with if it's right for my buyer.

The advantage, whether with your sister-in-law or another Licensed Realtor, is that you will gain expertise, dedication and a marketing plan to help you meet your sale goals. A rough market is a rough market and that may be one of your issues. But homes are selling in every single market. Now more than ever, you need someone whose whole passion and mission life is SELLING your home not just listing it! Give yourself the competitive edge and watch your home sell successfully!

Yes, I'm biased. But I have dealt with numerous clients who left their "reduced service" brokerage to obtain reputation, marketing, expertise and support that it sounds like you are missing.

I wish you all the best!
0 votes
Dark Horse C…, , Saint Charles, IL
Sun Jul 5, 2009
Thank you, everyone, for your comments! I have studied and continue to seriously consider your comments. I truly appreciate the help!!

I am particularly interested in and/or puzzled by the consistency of the "get it staged" comments. New construction has been our primary competition in the neighboring subdivisions of equivalent houses. Not to point the finger again, but my sister-in-law-realtor told me to take down all of our curtains!! The goal was to make the house look as "new" as possible.

Nevertheless, I agree with your comments that the photos look cold and uninviting. So, I've been adding some plants and artwork. And, we finally finished installing the new Kitchen backsplash. The Wolf oven/range will be installed within the next week or so. A few new (semi-staged) photos will appear on the MLS tomorrow and on http://www.OakHillsCt.com later today. I have yet to convince my husband to buy or rent staging furniture, but I'll get him there.

We finally have seen a couple of closed sales in this price range -- which have led us to reduce the price by $51,000 from $1,100,000 to $1,049,000. Though, Bless you Anne for thinking that the price is right on. It's nice to hear some encouragement!

As a side note, we have been told that having a pool can actually hinder the sale of a house in this area (West of Chicago). We heard a recent story of the Buyer requiring the Seller to fill in the pool before the closing, so that the Buyer's children couldn't run the risk of drowning. It seems like pools, water features, and golf courses are a matter of personal preference that could cut either for you, or against you. Fortunately, our neighborhood and the competing subdivisions have only a few pools. For price comparisons, I have been estimating that the added value of a pool is roughly equivalent to the value of our house being all-brick with a walkout basement.

Thanks, again!
Sheri
Web Reference:  http://www.OakHillsCt.com
0 votes
J R, , New York, NY
Sun Jul 5, 2009
Most sellers, unless we explain it to them, don’t understand why a particular agent doesn’t show their house. I mostly hear it from expired listings “why didn’t you show my house when so and so had it listed?!?!?” Well, I may not have had a buyer for it. Even if I had a listing in your price range I might not have a buyer for YOUR house. Hard to believe as it is, we don’t all have lists of buyers that we can contact. Not active ones anyway. We have lists of lookers and people who have called us, but they aren’t all buyers and they aren’t all for your house. Not to let your SIL off the hook, but that’s probably why she didn’t show it.

I will hang her on the hook for that “your house is priced too low” remark. Youo get no showings now, if your house was listed higher you’d get showings? I hope you will share her logic with us. I only hear that from sellers who are under the misunderstanding that if you price a house higher you’ll get buyers who are somehow “better” in other words, have more money and can presumably afford to pay more, but they aren’t smart enough to know when they’re paying too much. If you’re getting no offers and no showings, raising the price is not the answer.

Without knowing your area, if it hasn’t been shown it could be overpriced. Just because another house is LISTED at 1.7 and yours is 1.1 doesn’t make it a value. What have other houses like yours sold for? Does yours have a pool and the home that sold doesn’t? Or vice versa? I have to tell you, I am in an expensive area of LI, and I don’t have hoards of million + buyers begging me to take them to see houses. Could be your price range is slow. Do you live in a second home area? Second home buyers are notoriously slow to make decisions. They already have a place to live, so it isn’t like they’re going to be homeless if they don’t make a decision to buy. How many houses like yours are for sale, and not just in your own subdivision? Is yours the best value?
0 votes
Eric Hall, Agent, Wheaton, IL
Tue Jun 9, 2009
As you know in this market we are seeing very high market times. We are seeing higher market times on any home over $500k. The buyer "pool" for homes in that price range is smaller to begin with and add the current market conditions to that and you're in for possibly a long wait.

I can't speak for other Realtors but I wouldn't pass up showing a home that fit my clients needs especially if it had a 3.5% commission.

I agree with an earlier answer that the listing agent's job is to expose your property to as many people as possible. Very rarely will you see a listing agent show the property to one of their clients unless they call off the sign or website.

Often homes that are in good condition and priced low sit on the market for a long time, it's just the nature of todays market.

I recommend re-evaluating your marketing strategy to make sure there aren't any holes. Make sure you have strong WEB exposure because most buyers look their first. Also, you're property should be marketed with other "high end" properties.

If you have any further questions or need me to elaborate on any of my opinions please don't hesitate to contact me.

Good Luck!!
0 votes
Gino Metallo, Agent, Elgin, IL
Tue Jun 9, 2009
(Speculating), You probably are not getting the full force of Realtor's Marketing Program. I don't know what a flat rate company did for you, but apparantly you were not happy.

I can't comment on the commission.

Not generating showings - probably has a marketing issue.
0 votes
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