The Real Estate market is hot! It’s lucrative for both sellers and agents alike. The impression of most consumers is that since homes are flying off the shelves, they are selling themselves. This false equivalency has born dozens of flat fee companies and agents, low cost agents willing to do the job for 1% or less, large national companies offering discounted services and the most recent, a local start up by-passing agents altogether.
The state of the market right now begs the questions; What’s the future of real estate? Are flat and low-fee agencies the wave of the future? The short answer is no.
The industry has to change, this we know. More and more sellers are ‘price shopping’ thinking they are comparing apples to apples when they look at a flat/low fee company vs hiring a traditional real estate agent. “If my house goes under contract, it must be the same, I don’t need to pay anything more” they tell themselves. This is simply not the case. Nationally, 25% of homes that go under contract do not make it to the closing table. 25%, that’s ONE in FOUR! Why is this? In today’s market it’s not if you’ll run into problems, it’s when. It might be during inspection, or maybe your home doesn’t appraise for the offered price, or it could be that the buyer couldn’t borrow as much as they thought they could (BTW, that last one could mean they end up pulling out of the contract a few days before closing was supposed to happen). Then what?
Flat/low fee agencies business model is to do more volume. This means their systems have to be seamless and their agents working harder. In my experience, this leads to agents handling far too many clients and systems breaking down, leaving clients out in the cold with unreturned phone calls and much worse. Or as your mother would warn, you get what you pay for. I am just not sure if that business model is sustainable!
We call a buyers listed lenders to pre-qualify them before a seller signs a contract. We meet every appraiser at the property to present them with all our facts about how we got to our price. We are there day or night if you have questions or roadblocks, effectively holding your hand through the process and working the transaction start to finish. I truly wish you luck getting a low-cost company to do this. These companies do not offer that level of personal concierge-like service. And aren’t savings only savings once your home closes and you have the money in hand?
So how does the industry evolve? It already is. With more and more agents and less and less inventory of homes, agents are staying competitive with pricing, without sacrificing service. And since the statute of limitations for real estate litigation is three years, isn’t service important to you?
Today we've centered around SELLERS and the pitfalls of hiring these type of businesses. So you may be asking yourself, if I'm buying a home do I need to hire an agent or can I use the sellers agent to 'save money'? Stay tuned next week for that answer!
Written by Sarah Whitely, SarahWhitelyHomes.com
