The Best Use for “Coming Soon” – Doing Away With Agents

The “Coming Soon” feature is all the rage. Ever since Zillow announced the feature, all I see now are Coming Soon notices on top of For Sale signs in my neighborhood.

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If you are not aware, last year Zillow announced a new feature available on its website called Coming Soon. This allows homes to be pre-advertised for sale, before they can actually be purchased.

In theory this is a good idea. It can help build excitement for a home soon to come on the market, as well as provide an opportunity for the home seller to get feedback on their asking price without spending any days on the market. If you are getting ready to price your home too high, it would be nice to know before you actually listed it. The problem is that Coming Soon has nothing to do with building excitement or getting pricing feedback. Coming Soon is about pocket listings. Coming Soon is about dual agency. Coming Soon is about double ending.

Most home sellers are too naïve to understand the subtle trick the real estate industry is playing on them with the Coming Soon feature. Most probably think it is a good idea, but nothing could be further from the truth.

Imagine you are a home buyer and you see a Coming Soon home that you are excited about. You want to get in to see it. You want to make an offer. But you can’t. The only thing you can do is contact the listing agent. And that is the key to the scam.

The listing agent gets to identify interested buyers WITHOUT having to put the home up for sale. And if they can identify enough interested buyers, they can convince their seller there is no need to list the home on the MLS because they already have a buyer for them. And if they can keep it off the MLS, then they can keep the buyer’s agent’s commission too. And while most home sellers would view keeping it off the MLS as a good thing, most home sellers also do not realize that they probably just got screwed out of several thousand dollars. Any marketing approach that limits a home’s exposure (e.g., pocket listing) tends to limit its sale price.

It got me to thinking. If an agent can identify buyers without actually putting a home up for sale, so too can the home seller. It is simply a matter of taking some nice photos, writing a description, coming up with an asking price and posting it to Zillow (which is free). Then, when an interested buyer calls, rather than speaking to the agent, they will be speaking to the seller. And if the seller can find a buyer interested in paying the asking price, then they truly can keep it off the MLS, and thereby save the entire agent commission altogether. All they would need is a few hours of a real estate attorney to help with the paperwork. Now that is a good use of Coming Soon.

To learn how to make sure Coming Soon works for you and not against you, visit ReaLising. ReaListing helps home sellers keep more of their hard-earned equity.

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

It’s My Job as the Listing Agent to Get the Appraisal to Come in Right

I couldn’t believe what I just heard. Those words were spoken by an experienced and highly regarded real estate agent. Did he really believe what he just said?

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To offer a little background, I was watching a video of a real estate agent conducting an open auction to sell a home. It really is quite a clever idea, and something that is done often in other parts of the world.

Whenever there are a great number of buyers interested in a particular home, it is in the seller’s best interest to make it a competition. And the best way to do that is with an auction.

There are two different kinds of auctions the seller can employ. The first, and the one home sellers are probably most familiar with, is the sealed bid auction. With a sealed bid auction, the seller requests that the buyers submit a “best and final” offer to purchase the home. In this manner, buyers do not know what other buyers are offering and are left to guess as to what price it will take to win the home.

The other auction type is the open auction. You know the kind where the auctioneer speaks a mile a minute and looks around the room for buyers to raise their hand as the price goes up. And that is what this real estate agent was doing. He gathered all the interested buyers into the living room of the home for sale and began a live auction. It was fascinating to watch (although he did speak a lot slower).

Before the bidding began, one of the buyers asked the obvious question: what happens if the final bid is above the home’s appraised value? It does no good to submit a winning bid of $400,000 for a $300,000 home, unless you are an all cash buyer, of which these buyers clearly were not.

The agent responded to that inquiry with the line in the title of this post. In essence, he told the buyers in the room that it was his job to make sure the home appraised for whatever price the highest bidder offered. Now I am under the impression that it is the appraisers job to submit an objective and unbiased (by anyone, especially real estate agents) opinion of a home’s value.

Perhaps what the real estate agent meant was that he would take it upon himself to make sure the appraiser had all the relevant comparables. And by relevant, I assume he will be including all those “comps” that support the offered price and conveniently omitting all those that do not. I am okay with that, if that is what he meant.

I doubt there was a buyer in the room that picked up on what the agent said regarding the appraised value. They were probably too preoccupied with formulating their bidding strategies. But I did. And because of that I got a glimpse into the mindset of those operating in the real estate industry. There are just too many commission dollars at stake to leave a home sale up to the findings of a lowly appraiser. With thinking like that, I cannot imagine why we had a real estate bubble back in 2008 (and will probably have one again real soon).

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Will 2015 Bring Meaningful Change to the Real Estate Industry?

2014 saw a lot of new technologies and “aps” hit the residential real estate market with much excitement and fanfare. Some of them were even purported to help buyers and sellers. But when all was said and done, not much has changed.

problemHere is a list of problems in the real estate industry that all that technology did not do a damn thing to solve last year:

• We still have pocket listings
• We still have dual agency
• Lousy agents still expect the same compensation as good agents
• Commissions are still tied to the price of the home
• Sellers are still expected to pay for buyer’s agents
• There are still too many real estate agents
• It is still too easy to become a real estate agent
• There are still too many conflicts of interest between buyer/sellers and agents
• Sellers are still asked to pay for the buyer’s home warranty
• There is still buyer steering
• Agents still push their affiliated service providers onto their clients
• Contracts are still too difficult for the average consumer to understand
• Some MLSs still delay listings to the portals, limit the information, or do not send it all
• We still have minimum service laws

So, the question I want an answer to is this: will anything change in 2015? Probably not. All those problems cited above result in some pretty well-off operators in the industry, and none of them want to see anything change.

No, 2015 will be the same as 2014 and every year before that. Nothing meaningful will change in the residential real estate industry until the one group that can actually affect change does something about it. When buyers and sellers decide to stop being uninformed, lazy and fearful about the home buying and selling process, then we will see meaningful change. Until then, meet the new year. Same as the old year.

If you are a home seller and you are ready to sell your home a more intelligent way, that leaves more of your hard-earned equity in your bank account, visit ReaListing and help change the industry one informed consumer at a time.

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.