21,500 Reasons Why I Would Rather Sell a Home in the United Kingdom

For those that do not know, buying and selling homes in the UK is very different than in the US. tower of londonWhat are some of the major differences? In the UK…

• There are no Multiple Listing Services (MLS)
• There is no buyer agency
• Real estate agents are employees, not independent contractors
• There is no professional licensing for real estate agents

No MLS and no buyer’s agents? How could anyone ever sell a home there? To quote the article Is the U.S. Model Defensible vs. the UK Model?

“England, after all, has been buying and selling homes long before the Massachusetts Bay Colony was established. And in contemporary times, we hear nothing about homes languishing on the market in Ye Olde England because there are no buyer agents to guide buyers to this home or that home.”

No professional licensing? Now you have gone too far. Real estate agents must be professionally licensed, right? Like somehow the four hour test that real estate agents take in the US qualifies as some significant barrier to entry. As things turn out, the UK has that figured too. The really important things in a real estate transaction, like paperwork and the closing process, are handled by lawyers, as they should be.

Oh, there is one other difference in the UK model. Commission rates average about 1.5%, rather than the 5%-6% sellers pay in the US. That equates to a savings of $21,500 on a $500,000 home, which prompts the author of the article to ask the following fantastic question: What is the American homeowner getting for that additional $21,500 in cost?

There is no way to know, but “it feels like a stretch to suggest that comparable homes are selling for $20K more in the US vs. the UK simply because the American REALTOR has access to a database. More importantly, however, there’s preciously little evidence that these employee-agents in the UK are failing to put forth the effort for the homeowner.”

So, in the UK, home owners pocket a lot more money, real estate agents get a salary and home buyers have figured out ways to find homes without the help of a buyer’s agent. (They must have since the average sale price for a single family home in Central London in 2014 was just under $2.4 million). So, what’s the problem?

The problem is that Keller Williams is Getting Ready to Ruin the United Kingdom by trying to convince them that the US model is better. That everyone would be better served with 6% commissions and real estate agents running around working for free all day. But if I were Keller Williams, I would be more worried about the UK model coming to the US.

To quote the article one last time:

“If selling a home in the U.S. costs $20K more than it does in the UK, there has got to be real value being delivered to the seller. As the world gets more and more interconnected, what works in one country is quite likely to migrate over to another. If British homeowners are getting great service from employee agents who do not cooperate with buyer agents, then American homeowners are likely to start asking just what it is that they get for paying a whole lot more.

Enough said. If you do not want to wait for the UK model to come to the US, check out The Intelligent Home Seller.

 

 

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.

Should the Real Estate Agent’s Face Be on the For Sale Sign?

Not all, but many real estate agents put their smiling face on the For Sale sign they put up in the yard when they represent a home owner in the sale of their home. I see this most often with the national brokerages, such as ReMax and Keller Williams, and less so with small, independent brokerages. And the question I want an answer to is why?

images

Normally, when you want to sell a product, you try to entice prospective buyers with a beautiful photograph of the product itself. You know, to whet their appetite. Today, most home buyers start their home search on the internet where they can easily get an idea of a home’s interior with the posted photographs. But, there are still plenty of home shoppers who drive around searching for homes the old fashioned way: by looking for For Sale signs. Why else would you put up a For Sale sign?

It seems to me that if a real estate agent really wanted to take advantage of every marketing opportunity they had when selling someone’s home, rather than put their picture on the For Sale sign, they would put a gorgeous interior picture of the home instead. You know, to whet their appetite. But I guess that is the point.

When an agent puts their image on the For Sale sign they are communicating loud and clear what they are really selling with that For Sale sign: themselves. Because of the crazy way the real estate industry is structured, where almost no real estate agents are actual employees, and are therefore perpetually unemployed, they always have to be on the lookout for their next customer. And what better way to do that than with a nice portrait of themselves on a For Sale sign. I cannot think of another profession that so blatantly self-promotes with their own mugshots. Have you ever seen plumber’s face advertised anywhere?

If you want to know why real estate agents often rank low in consumer surveys, this is why. It is not that they make their self-promotion a top priority. Is it that they say that they don’t. If you tell me that I am your top priority, then put a damn picture of my home on the For Sale sign and not a picture of you. Or, just be honest about it. Tell me that because of the crazy nature of the real estate industry, you always have to be promoting yourself, and while you promise to give me 100% effort when helping me sell my home, you will also use that opportunity to advertise yourself. I can handle that.

I still wait for the day in the real estate industry when honesty and transparency rule the day. Where consumers are not treated like acquiescing buffoons, but rather as equal partners in the home selling process. But until that day arrives, check out ReaListing for tips on saving money when you sell your home.

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.