The Reality of Realty

The Reality of Realty

So you want to list your house. Who do the consumers want to list with? Let me give you an example of average layman thinking: The house in this example is worth between $475,000 and $500,000. The consumer interviews three agents. One agent is a familiar face in the community they live, responsible for many, many sales in that community. The second agent is another experienced pro and the third is an inexperienced agent referred by a friend.

Agent one wants to list at $499,950, agent two wants to list at $489,950 and agent three wants to list at $600,000 and is offering a 2% discount on the broker fee. Since the seller owed over $500,000 on the mortgage, they decided to go with inexperience because the price was music to their ears! Forget the fact that the other two agents provided a detailed CMA (like an appraisal, only done by a real estate agent to determine value, using houses similar to the subject that are active for sale, pending escrow, that have recently sold and some similar to the subject that failed to sell…….usually because they were overpriced). Further, the other two agents have 50 years experience between them and have successfully sold over 3000 homes between them. The Seller went with PRICE over experience. How do you think this is going to turn out?

About 50% of consumers make this exact same mistake every day in America. Then after they are listed, they find it very hard to get in touch with their agent. This is sometimes the case because they are working their other job at Target or Wallmart and can’t work real estate while at the other job. When they do get in touch with them, they are asking for price reduction after price reduction. They certainly are not spending money marketing the home because they gave those marketing dollars away when they listed at a discount. Months pass, no offers, few showings. The listing expires.

Part II: Did they learn anything or will they repeat the same mistake again and again? Don’t think this applies to new or inexperienced agents only. Some new agents are able to successfully market homes when they are under the wing of a more experienced agent. It’s how most good agents get their start. It’s why some make it in this business, but the overwhelming majority of new agents fail and are out of the business within 12 months of starting. You see, it’s hard to make a living in real estate when you can’t make any money. Back to my point, some experienced agents play this game as well. When competing against another agent they know, they bump up the asking price or that CMA value. You see, they think (and they are correct) people like them better if they have the highest price. It works. Much of the time, they get the listing. They have their assistants call weekly (never them) and they start to work that price down! One of my competitors listed a home in Cheval. They overpriced it by almost $500,000. I think the original list price was $1,200,000. After about TWO years, the house was sold for $775,000. Did the market fall that far from 2005 to 2007? NO. The game was played, either by ignorance or on purpose, it was played. Had the home been listed at market in 2005 ($990,000) it would have sold in less than 30 days for full price. The seller carried the mortgage, the taxes, the insurance plus all the upkeep for almost two years and lost over $200,000 alone just in the sale. The agent still got paid. Further, they advertised that listing for two years and probably sold 3-4 other houses that were priced right in the process by working buyers who called their office on the overpriced listing……..extra money at their clients expense.

I still believe in being as honest as possible no matter how ugly the truth is. I still need to put my head on a pillow at night and sleep. It is what my God and savior Jesus Christ expects of me and what I expect of myself. All that this honesty has gotten me in this dismal market is a place as #1 in the entire world with ERA Franchise systems (Team Arcuri) as well as finishing 2007 as #4 in the world. I think God has kept is hand on my business because I have continued to be as honest as possible under impossible market conditions. The TRUTH is always the better route, even when you see others taking the other road. I refuse to go down that path and mislead the consumer for a quick buck.

I refuse to flip flop on the issues like Obama just for a vote. I only tell the truth. If it is not what the Seller or Buyer wants to hear, it is the same story.  Like Senator John McCain, I am the “Straight Talk Express” of real estate

That is The Reality of Realty!