Category: Help-U-Sell

‘Percentage Based Commissions Are Nuts’ Video

I worked with Robert Stevens and the Sarasota Help-U-Sell team to create a new video explaining why the old fashioned way to price real estate services is sooo off track, and why Help-U-Sell makes so much sense in today’s world.  I’m very pleased with it from a content and communication standpoint – I think it gets the message across pretty well.  And I’m delighted with the graphics packaging and presentation.  Design whiz, Theo did an excellent job of putting pictures and arithmetic to my words.

The real estate industry is so invested in the status quo, so utterly driven by structures and systems that have nothing to do with getting property sold, with helping people find their dream homes, that change is almost impossible for them.  For a big real estate company built on the idea that home sellers should pay 6% or 5% or 7% of the sales price as a commission to change over to a much more logical and fair flat fee system would be like trying to turn the Titanic on a dime (and miss that iceberg!).    Yet the iceberg is out there, looming, getting closer by the day and year.

When the percentage based ship goes down, consumers will win.  They’ll be charged for real estate services they same way they are charged for medical services or legal services or auto mechanic services:  Set Fee Pricing.  It will be fair and it will make sense . . . and they will save thousands.

If you are ready for tomorrow, if you’re tired of feeling taken even when your agent and broker do a good job, if you want to be delighted not only with the service but also with the fee, Call Help-U-Sell.  It is the modern way to sell your home.

Your 6% Partner

In my varied life as a business-person, I have had partners from time to time.  The form of business might vary –  sole proprietorship, limited partnership, even corporation – but in our guts we knew what we were:  partners.

As partners we had a division of labor:  I’d do things I was good at and my partner(s) would focus on areas in which they had expertise. And, as partners, we shared expenses and split profits.

My own partnerships were pretty simple and the split was usually equal among the parties.  Working with other businesses, however, I’ve often seen splits that were weighted one way or another 60/40 or 51/49 and so on.

Has it ever occurred to you that when you hire an ordinary real estate agent, you are taking them on as a partner in your property?  Really:  if you are agreeing to split with the agent on a 94/6 basis, you’re taking them on as a partner in your property.  Maybe you’ve been in it, improving it, investing in it for five years.  This agent is coming in during the final 3 or 4 months of your ownership,  and somehow is entitled to 6%* of what you’ve built!

And here’s the big kicker:  we’re not talking about splitting your profit 94/6 with the agent.  You’re going to pay them 6%* of the gross!  Of the Sale Price.

Let’s assume the house sells for $400,000 and that you have a $300,000 mortgage that must be paid off at closing.  The agent’s 6%* commission is $24,000.  Ouch!  That’s 6%* of the Sale Price.  But after you pay off your mortgage, you won’t have $400,000, you’ll only have $100,000 and it’s from that that you must pay the agent.  That $24,000 commission is almost 25% of your proceeds, your net!

Are you really going to give away 25% of your net to an agent who will put the property on the Internet, fill in the blanks of the contract, manage the inspections and keep things moving to closing?  Really??

I’m not.  No way.  There is not that much value in the relationship.  Don’t get me wrong:  Realtors are incredibly valuable in the equation, but 25% of your net valuable?  Hardly.  I”m going to pay a Set Fee to sell my house.  You know a Set Fee, like what my dentist charges to fill a tooth, like my doctor charges for an office visit, like my mechanic charges for an oil change. I’m going to pay a flat $5,550* to sell my $400,000 house – the same $5,550 my neighbor with the $350,000 house will pay.  And for that, I’m going to get full service, great marketing, agent representation and hand holding every step of the way.   I’ll be saving almost $20,000 over what that ordinary agent was going to charge me!

So how about you?  Do you want to save thousands?  Are you tired of having a new partner swoop in at the 11th hour of  your home ownership to claim a big chunk of your equity?  If so, here’s what you do:

Click the link up there in the top right of this page where it says ‘Find a Help-U-Sell Office.’  You’ll be glad you did!

*Real estate commissions, whether percentage based or set fee, are always negotiable between the consumer and the broker.  They are not set by law or Realtor rule and there is no ‘going rate.’  The $5,550 I used to illustrate a Help-U-Sell set fee is just an example.  Help-U-Sell fees vary by office because different marketplaces behave differently and require more or less effort and marketing expense.  Having said that, there is one great truth here:  you will almost always save big on real estate commissions when you work with Help-U-Sell.  Savings is what we are all about!

Cautious? Or Crazy?

There was a piece in the industry trades this week about a new ‘trend’ among home buyers. Seems some folks are making their offers contingent on a ‘sleep-over.’ They want to spend a night in the home before they solidify their commitment.

Before you snicker, too loudly, think about it . . . from the home buyers’ perspective. You love the house, you love the neighborhood, at least you love it during the day . . but what happens after the sun goes down? Is the house next door owned by young Jesse Pinkman from ‘Breaking Bad,’ trashing the place with regular week long parties?  Is that rarely used rail line half a block away actually used every night around 2 am?  Is the proximity of the Hospital Urgent Care facility comforting and disturbing at the same time (what with the near constant siren noise)?  How else would you know about the ambiance of this particular house at night unless you just GO THERE?  Spending the night, while unusual, is certainly not weird or strange.

I’m remembering the condo I owned in Atlanta 25 years ago.  It was what I could afford.  Enough said.

After I settled in, a very predictable night time pattern emerged.  I’d hear my upstairs neighbors laughing a Johnny Carson close to midnight (the floors were not that soundproof).  Soon after, they’d go to bed  . . . and then the squeeking would begin.  Rhythmic bed squeeking.  You know:  eek eek eek eek eek eek eek eek. It would eek and eek and eek and then it would stop for a moment and then it would start up all over again.  Sometimes the eeking would continue for an hour or more.  I’d lay in bed, staring at the ceiling, almost as much in awe as a I was angry for the loss of sleep!

After several weeks of  sleep deprivation and hours wondering how in the heck I was going to deal with it, an opportunity presented itself.  I happened to be coming into the building at the same time as my neighbors.  When we got to the front door, I opened it for the lady and then turned to the guy and asked if I could speak with him for a moment.  As the wife started up the stairs we hung back.

‘I don’t know how to say this,’ I began.  And I didn’t; it was possible he’d take great offense, possible he’d threaten violence, who knew?  ‘But your bed has a squeek.’

‘A  sqyeek?’ he came back, head tiled, brow knit.

‘Yeah,’ I said, ‘You know:  eek eek eek eek eek eek eek.’

‘Oh, that!’  he answered.  ‘We hardly notice.’

‘Yeah, well, I can’t help but notice, and though I am in awe of your stamina, I need my sleep!’  I said chuckling.

‘Oh!’ he said,’I had no idea!  I’ll go work on it right now.’

And he did.  No more sleepless nights, no more  eek eek eek eek eek.  And the best part was that I’d met my neighbors!  We became friends and socialized a bit over the next couple of years.

Now, what if I had spent the night in that condo before buying it?  What would I have done differently?  Would I have gone ahead with the purchase?  I don’t know – but I’d like to think I would.  My time there – and the appreciation I experienced  – were worth a few weeks of discomfort and it was strangely rewarding to take care of the problem the old fashioned way:  by talking about it.

I don’t want to suggest that pre-purchase sleep-overs are a great idea.  It’s certainly a stretch and I’m sure there are some serious paperwork issues that would need to be taken care of before anything like this occurred.  But I do believe that home buyers should get to know their prospective new neighborhood at all hours of the day and night.  I think you can usually learn what you need to know by simply walking the neighborhood after dark, by visiting the super market during a peak time, by visiting the closest school when kids are getting out fo the day.

Beyond that, as a purchaser, you have an implied duty to be flexible, to get along, to work with your neighbors to make your neighborhood a better place to live for everyone.  And never be afraid to put a damning squeek in its place!

 

 

What To Pay Your Realtor And How

(Once again, THIS is the single most popular post on the Set Fee Blog. Every day, dozens of people find their way onto this site searching for guidance on what to pay their REALTOR. I’ve freshened this up a bit – added a little more detail – and want to post it again. I only hope this helps some people hang on to more of their hard earned equity.)

I check my stats and other metrics for The Set Fee Blog fairly regularly. It helps me to know what’s drawing visitors and what’s not. It’s also helpful to see what search strings people are using to find me on the web.

Today, I had the following as a search string:

“What Percentage Do Real Estate Agents Charge?”

Ok, so it’s not that unusual. In fact I’ve seen it in the results for this blog before. But today it just jarred me:

What a sad, stupid and unfortunate question!

Seventy plus years of REALTOR double-talk has trained the public to expect to pay a percentage of the sale price of their house to an agent when it sells . . . and that makes no sense whatsoever.

What does a percentage of you home’s value have to do with getting it sold? Nothing!

Think about it:

Here you are in your $350,000 house. Thankfully, you are not upside down. You have roughly $60,000 in equity. So you decide to sell, and list with ABC Realty**, who charges you (and every seller with whom they work) 6%*. When your house sells (for full price), that’s a commission of $21,000!

I’ll give you a moment to catch your breath . . . before I point out that that may be 6% of the sales price, but it’s 35% of your equity!

Meanwhile, your neighbor down the street also wants to sell, but his home is smaller. It’s only worth $250,000. He also lists with ABC and agrees to pay their 6% Commission. When the house sells for full price, the homeowner is going to pay $15,000 — still high, but not nearly as high as your $21,000 commission.

Now, here’s the question of the day: What did YOU get for the extra $6,000 you paid to sell your house through ABC?

More Advertising?

More Open Houses?

A better Sign?

Oh, maybe your agent worked $6,000 harder! Yeah, right.

What you got for the extra $6,000 you paid is this:

Absolutely Nothing

In almost every case it takes no more time, effort, energy, money or marketing to sell a properly priced $350,000 house than it does a properly priced $250,000 house. There are some situations in some areas where a market niche, say, luxury homes, might take a little more time and might require additional or specialized marketing. But these situations are rare . . . and $6,000 extra dollars to sell your $350,000 house? That’s absurd.

It makes no sense today, made no sense yesterday, and will never make any sense at all.

Please don’t take this to mean that your percentage based real estate friend is a bad person.  The percentage model is so deeply ingrained in the ordinary real estate world that today’s practitioners don’t even question it.  It is all they know.  And the truth is, if they were to abandon it in favor of something that makes sense (i.e. Set Fee Pricing), their business model would collapse.  They operate in a world where so many people get a cut of the big commission you pay that changing direction in favor of something better would be impossible.

Smart Brokers – by the way, ‘Smart’ is a synonym for ‘Help-U-Sell’– Smart Brokers charge a set fee. Everyone pretty much pays the same thing no matter what the sale price is. It’s logical. The Broker works very hard to determine his or her hard costs of carrying a listing, then adds a reasonable profit to it, and . . . that’s it: the Set Fee the office charges everyone.

Here’s a little bit of scripting I actually heard in a REALTOR seminar some years ago. It’s what an agent is supposed to say when a potential seller is shocked by the high percentage based commission.

“I know it seems like a lot, Mr. & Mrs. Seller, but think about it for a moment. We’re getting 6%, yes, that’s true; but YOU’RE getting 94%! I think you’ll agree our commission is actually a bargain!”

I hope next time you need to sell, you’ll do the right thing and call a Help-U-Sell set fee broker. You’ll save a bundle (the set fee is usually thousands of dollars less than whatever percentage based commission you’re being quoted). And you’ll have the satisfaction of knowing that, finally, for the first time in your real estate life, you haven’t been taken to the cleaners!

*Commissions, whether set fee or percentage based, are always negotiable. They are not set by law or REALTOR rule. They are set individually by office Brokers. Price fixing occurs when different Brokers get together and agree to charge the same thing. That’s highly illegal. Different Help-U-Sell offices charge different Set Fees, because the carrying costs of marketing a listing vary from market to market, as do the number of days it takes a properly priced listing to sell.

**The “ÄBC Realty” referred to in this blog is fictitious and is used only for illustrative purposes. Any resemblance between it and any other “ABC Realty”, is purely coincidental.

Lead Generation with Facebook

I get asked all the time:  ‘What kinds of things should I post on Facebook to generate leads?’

The answer is:  ‘I don’t care.’

OK.  That’s a little over the top.  My answer is supposed to unfreeze the questioner, to get them off the notion that posting on Facebook will somehow magically generate leads.  It won’t.

If you are a Realtor, you can use your personal Facebook page and/or your Facebook business page to keep in touch with people who know you – at least a little – and to remind them that you are in the business.  Of course this is important!  We want everyone who knows us – even those who know us just a little – to know we sell real estate, are active and successful.  That’s why we post our new listings on Facebook, our photos of happy clients after closing, our open houses and relevant articles about the market.

But the audience here is people who know us.  It’s not strangers.  Leads – which are the things everyone wants to generate with Facebook – are strangers who call us to help with their home buying or selling process.

If you want to generate LEADS with Facebook, you’re going to have to go about it the old fashioned way:  you’re going to have to market on Facebook.

Marketing is the careful planning, creating, executing and monetizing of a strategy aimed at reaching a specific target audience with potential for needing your services.  With Facebook, your tool for accomplishing this is Pay-Per-Click advertising.

When you open your Facebook page, you’ll see a column to the left of your Newsfeed that contains Pay-Per-Click ads that have been targeted to you based on your profile and Facebook behavior.  That’s where you want your ad to be.  The small teaser ads lead to a Landing Page of some kind that gives the clicker the information hinted at in the teaser.  Sounds simple . . . and it would be if we were in the giving information business.  But we are not.  We are in the real estate sales and marketing business, so that simple process of Facebook Teaser ad and Landing Page becomes a little more complex.

At Help-U-Sell, we market for one thing:  Sellers.  So your teaser ad needs to appeal to home owners who are thinking of selling.  That part really is easy.  The logo, all by itself, speaks to them.  But so do phrases like:  ‘Never pay 6% to sell your home again!’, ‘You paid HOW MUCH to sell your home?’ , ‘How to save thousands selling your home,’ ‘Sell your home for $4,950!’ and so on.

But once a potential seller sees your ad and clicks on it, where do they go?  To you Help-U-Sell website?  I don’t think so.  Your website is geared toward buyers (and it should be).  Your website is a place where we connect with them via home search and other tools.  Instead, you need to send people who click on your teaser ad to a very specific Landing Page, absolutely focused on your offer to home sellers, sizzling with just enough information to motivate the clicker to contact the office.

That’s really important, so I’ll repeat it:  You need to send people who click on your teaser ad to a very specific Landing Page, absolutely focused on your offer to home sellers, sizzling with just enough information to motivate the clicker to contact the office.  

Your landing page should say nothing aimed at buyers, mortgages, credit repair, or any other aspect of the business.  It should be short, simple and razor focused on what you do for home sellers and how much they can save.  It should also be packed with Help-U-Sell credibility boosters:  Sold and Saveds and Testimonials.  In other words, your Landing Page should look like an ETM . . . because that’s what it is:  an electronic ETM, delivered via Facebook as opposed to the old fashioned one delivered in the mailbox. It should have the same structure and encourage the same event:  a call to the office to find out more about your program for home sellers. Click HERE for an example.

I love Facebook pay-per-click for Help-U-Sell brokers for several reasons:

  • It is highly targeted advertising and fits perfectly well with our own geographical targeting strategy.
  • It is surprisingly inexpensive.  And effective campaign can be mounted for $200 a month, more or less.
  • It is wonderfully flexible.  You can change up your campaign in mid stream, start and stop it at will.
  • It is trackable.  Facebook keeps track of the clicks so if you install office systems to track resulting inquiries, you’ll know what the program produces.

I have created Facebook pay-per-click campaigns for my Blogging clients (you know, I create, manage and feed blogs for a handful of Help-U-Sell Brokers).  This past week I offered the same service – which includes creation of the Landing Page, the Teaser Ad and managing the setup process – to Help-U-Sell brokers in general.  I’d be happy to help you jump into this exciting process, too.  Just send me an email (jamesdingman@gmail.com) and we’ll explore the possibilities.

We know that today’s consumer of real estate services is online.  We know he or she is into Facebook almost daily.  THIS is how you find that person.  THIS is the next step in the evolution of Help-U-Sell marketing and I urge you to get on board.

 

Accessibility Toolbar