Hi Everyone:

I just got an e-mail from a journalist for a national Real Estate publication.  He was asking me to comment on 3 questions, and rather than simply send him an e-mail, I thought I might share them in a blog-post….  after all, thats what blogging is all about.  So here are his questions, and my responses to them:

1)  There’s obviously a cost to using a REALTOR®.  What should Sellers expect for that?

I do understand the question, but prefer to replace the word “cost” with the word “investment”.   I always explain to home-owners that the ONLY reason you hire a REALTOR® is to do the marketing for the home! Period!  Not for flashy sales-talk, or pie-in-the-sky promises.  So sellers should look for, and expect, a great marketing plan that covers all the bases.  Consider this:

The more marketing you do, the more potential buyers you reach, and the better chance at finding that perfect buyer who will pay you the most money.  You will find this true in ANY industry, which is why companies spend money on advertising:  they know it works and in the end, the demand for their product increases and keeps the prices up.  That is why they “invest” in marketing.

The commission will usually include ALL the marketing.  I say ‘usually’, because real estate agents are free to set their own contracts, and may get creative in writing these contracts, but from what I’ve seen, and from my own practice, the commission includes ALL marketing.  So there should be no extra costs for newspaper advertising, television coverage, virtual tours, etc etc.  For a look at my marketing plan, go to Marketing Plan.

2) How important is the experience of a REALTOR®?

To a certain point, it is very important,…but only to a certain point.  While you may choose not to entrust a brand-new agent with your million-dollar mansion, you should equally contemplate before handing over this responsibility to someone just because they’ve been ‘in the business’ for 30 years.  The real estate market is always changing, and things like blogs, twitter, podcasting, virtual tours and social media are as important today as , for example, the Internet was 10 yrs ago.  Yet I know many agents who don’t have a website, don’t even carry a pager and wouldn’t know Facebook from Twitter.

It comes back down to this:  Its the agents “Marketing Plan” that’s important, not his/her years in service.  I know many agents with only a couple of years experience who would out-market any of their competitors, given an opportunity.  Also, Experience is a funny thing:  In a decade, some people learn hundreds of things, and some people learn something hundreds of times.  Years DO NOT equal Ability.

3)  What are some risks to “Going It Alone”?

I’ve heard responses like “Home-owners may not know what they’re doing when faced with competing offers”,  or arguments like that.  However, as a home-owner you can always ask the buyer to leave the offer open for a day or two, so that the sellers lawyer can look it over, so I don’t buy this reasoning.

The biggest risk for the “Do-It-Yourself” crowd lies in the missed opportunity.  I think back to someone who once told me that they managed to sell their home by themselves, simply by plunking a “For Sale” sign into the front yard.  After only 2 days, someone knocked on their door and gave them their price.  AFTER 2 DAYS!  So my questions is:  How many people knew about this house being for sale?  50?  100?   And if  you can sell to this small sampling of a market, imagine how many people would have competed for this house and paid 10 to 20% more.

Do-It-Yourselfers simply can not access the entire market.  The only way to do that is to list with a REALTOR®.  Missing out on the best buyers is more than a ‘risk’…  its actually Reality for the Private Seller.

Here are a few of the most common questions home-owners have, and answers to them:

Q: What kind of questions should we ask a prospective Listing Agent?

A: Here is a guide to some of the important points to ask a Listing Agent. Please see the video in this post.

Q: How do we create a ‘bidding war’ for our house or condo?

A: There are several ingredients to creating a bidding war, including: Setting a realistic Asking Price, generating lots of Buyer Interest and also the status of the current market. For a video explanation, see this post.

Q: If we receive a full-price offer on our home, are we obligated to accept it?

A: No. If you were a store-owner, advertising a quart of milk for $1.00, you WOULD be obligated to sell at that price (or issue rainchecks), however home-owners are exempt from the laws that govern this issue. However, while no one can force a home-owner to sell at an advertised price, the question remains: “If he/she was not going to accept $220,000 for the home, WHY did we LIST it at that price?” For more indepth explanation, please watch the video in this post.

Q: We’ve just received a letter from a Real Estate agent claiming that he has “several buyers for our house”. What should we do?

A: Call me direct, at 333-2202, anytime. By listing your home with me, we will find ALL the agents who have buyers for your home, thereby assuring you complete exposure and the best possible chance at getting multiple offers. For a further explanation, please check out the video in this post.

Q: What about these Free Over-the-Internet Home Evaluations? How do they work?

A: In this fast market, where the values of homes change on a weekly basis, you need to know precisely what your home is worth. The ONLY way this can be established is by having an agent come into your home. These “over-the-net” evaluations are a hook to get the home-owners to call these companies, which then sell your information back to a REALTOR® who ends up having to come to your house anyway. For a personal market evaluation, call me anytime. For more info, watch the video in this post.

Q: Since this market is so hot, can’t I sell my home by myself?

A: In many cases you CAN sell your own home. It’s not secret that there are many buyers looking at houses, so simply by placing a “For Sale” sign on your property, you may indeed have strangers come to your door or call you up, showing interest in your home. But here is the key: In a HOT market, there may be MANY people interested in your home. Private Sales have, traditionally, made up between 5% and 10% of the entire market…. always have, and probably always will. Since you are looking for the BEST BUYER for your home, what are the chances that this elusive person is in that 5-10% portion of the market? Add to this the fact that the most serious Buyers are working with Real Estate Agents, and you quickly come to the realization that by trying to sell privately, the home-owner is missing out on a huge, and very important part of the market.

Q: Is there a difference between REALTORS®? I mean, they all provide the same service, don’t they?

A: We are all called REALTORS®, we all place homes on the M.L.S.®, but that’s pretty much where the similarities end. Just as no 2 lawyers are the same, no 2 doctors are the same, so we can quickly see the differences between Real Estate professionals. I always say: You hire a REALTOR® for one reason: To do the marketing and advertising for your home, and this is where a huge difference becomes apparent. To see my marketing plan, click on the video at the top right side of this page, I think it tells the whole story.

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I update this Blog on a regular basis, adding new listings, market updates, news and interesting (well, at least I think they’re interesting) pieces of information. You can make sure that you receive the posts by two ways: Subscribe to the RSS (check the toolbar along the bottom of the screen) or fill in this form and you’ll get the latest blog posts via e-mail, once a week.

Bo Kauffmann of Remax Performance Realty is the recipient of the 2009 Silver Medallion Award from Winnipeg REALTORS®, the Platinum Club Award from Remax, and is one of Winnipeg's top-producing Real Estate Agents.  Check out his website at WinnipegHomeFinder, follow him on Twitter or email him at boknowshomes@gmail.com

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