Isn't Madison Wisconsin 2000 Miles Away?
How about some bookmark love? ::
There has been so much discussion about how the New York Times released a study that looks at the success of a Madison Wisconsin For Sale By Owner Site
Keeping in mind that Madison Wisconsin is about 2000 miles away from here, there are some other caveats that the New York Times points out themselves:
"The researchers found that homes on the multiple listing service sold somewhat faster than houses on the for-sale-by-owner site. The study also did not place a value on other services provided by agents in selling a home."
They also said that Madison doesn't represent the nation as a whole.
I was first tipped off by this story by the guys over at the 1000Watt Consulting blog. My first thoughts started to get too long for the comments section, so I'm just going to copy them here since they are really deserving of their own post.
My Initial Reaction:
I feel like there is a glut of misconception out there.
On some of the comments, I see people blaming Realtors for driving up the prices of homes. C'mon, economics is what does that not some Realtors conspiring together to gouge people. I'm an honest person and I have a thick skin, otherwise I may wither away.
The amount that a Real Estate Agent charges for commission is set by the individual agent. It is negotiable.
I have seen some cases where the commission has been more than 6%.
Let's be clear about something a Realtor's job description is much longer (much, much, longer) than what people realize. It more than selling, being a taxi driver, or just doing the contracts. It is more than negotiations.
I have had to be an errand boy, stand in long lines, go to all home improvement stores, research imported rock, deliver food, wash cars, bicker with security guards, on and on and on.
Not all agents are worth it. That is fine, no one is forced to work with them. But if you sit in front of me, and ask me how much I'm worth, I will show it to you and prove it every time period.
The internet isn't going to replace Realtor's because ultimately there is a huge difference between raw information (which the internet offers) and knowledge.
Knowledge would be the understanding of that information (be it pricing data, sales figures, appraisals etc.) as observed in the backdrop of experience, and a long running history of performance.
I'll give you knowledge every time.
Some further perspective:
I just remembered something, that's that most full service agents forget to break down the logic behind why they claim to get top-dollar. If they fail to do the breakdown and properly explain that, then they aren't likely to justify their fee prices or be very convincing to their potential client.
Some agents aren't smart enough to do this.
I'd like to do the breakdown though.
First, I have to reiterate that this is with respect to my market in Southern California, it may be different in Boise or Green Bay.
1) We are swimming in real estate advertising. Every newspaper, circulation, magazine, classified section is packed to the gills with advertising.
2) Real Estate is a numbers game. '
There are 2 groups of buyers:
A: Buyers that know about your house.
B: Buyers that don't know about your house.
The more people you are able to transfer from group B into group A, the higher the statistical probability that you will you get someone willing to pay you the asking (or close to it) price.
3) There are times that lightening strikes right off. The times that a person sells by owner (or with an agent) and a buyer swoops in to buy that house right up.
These cases are usually played up really big, to make it seem like this happens all of the time.
In this market, those would be instances that fall outside the statistical norms. While they are possible, they are less probable.
4) In order to maximize the market saturation of your new listing, and swim as described in #1, a full service agent markets (read not the same as advertising) your listing. This is the basic difference between full service and everything else.
Marketing a property to achieve high saturation in a place where people are bombarded with advertising is critical.
Marketing costs money, that's a big chunk of the money that the agent foots with the aim of getting the commission.
5) The ultimate goal of the marketing is to transfer the largest possible number of people from group B into group A, and give the seller a higher probability of getting top dollar.
6) It's possible for people to do lots of free marketing on their own with the internet. Full service agents aim to do this, but also participate in the marketing that does carry a cost.
Keeping in mind that Madison Wisconsin is about 2000 miles away from here, there are some other caveats that the New York Times points out themselves:
"The researchers found that homes on the multiple listing service sold somewhat faster than houses on the for-sale-by-owner site. The study also did not place a value on other services provided by agents in selling a home."
They also said that Madison doesn't represent the nation as a whole.
I was first tipped off by this story by the guys over at the 1000Watt Consulting blog. My first thoughts started to get too long for the comments section, so I'm just going to copy them here since they are really deserving of their own post.
My Initial Reaction:
I feel like there is a glut of misconception out there.
On some of the comments, I see people blaming Realtors for driving up the prices of homes. C'mon, economics is what does that not some Realtors conspiring together to gouge people. I'm an honest person and I have a thick skin, otherwise I may wither away.
The amount that a Real Estate Agent charges for commission is set by the individual agent. It is negotiable.
I have seen some cases where the commission has been more than 6%.
Let's be clear about something a Realtor's job description is much longer (much, much, longer) than what people realize. It more than selling, being a taxi driver, or just doing the contracts. It is more than negotiations.
I have had to be an errand boy, stand in long lines, go to all home improvement stores, research imported rock, deliver food, wash cars, bicker with security guards, on and on and on.
Not all agents are worth it. That is fine, no one is forced to work with them. But if you sit in front of me, and ask me how much I'm worth, I will show it to you and prove it every time period.
The internet isn't going to replace Realtor's because ultimately there is a huge difference between raw information (which the internet offers) and knowledge.
Knowledge would be the understanding of that information (be it pricing data, sales figures, appraisals etc.) as observed in the backdrop of experience, and a long running history of performance.
I'll give you knowledge every time.
Some further perspective:
I just remembered something, that's that most full service agents forget to break down the logic behind why they claim to get top-dollar. If they fail to do the breakdown and properly explain that, then they aren't likely to justify their fee prices or be very convincing to their potential client.
Some agents aren't smart enough to do this.
I'd like to do the breakdown though.
First, I have to reiterate that this is with respect to my market in Southern California, it may be different in Boise or Green Bay.
1) We are swimming in real estate advertising. Every newspaper, circulation, magazine, classified section is packed to the gills with advertising.
2) Real Estate is a numbers game. '
There are 2 groups of buyers:
A: Buyers that know about your house.
B: Buyers that don't know about your house.
The more people you are able to transfer from group B into group A, the higher the statistical probability that you will you get someone willing to pay you the asking (or close to it) price.
3) There are times that lightening strikes right off. The times that a person sells by owner (or with an agent) and a buyer swoops in to buy that house right up.
These cases are usually played up really big, to make it seem like this happens all of the time.
In this market, those would be instances that fall outside the statistical norms. While they are possible, they are less probable.
4) In order to maximize the market saturation of your new listing, and swim as described in #1, a full service agent markets (read not the same as advertising) your listing. This is the basic difference between full service and everything else.
Marketing a property to achieve high saturation in a place where people are bombarded with advertising is critical.
Marketing costs money, that's a big chunk of the money that the agent foots with the aim of getting the commission.
5) The ultimate goal of the marketing is to transfer the largest possible number of people from group B into group A, and give the seller a higher probability of getting top dollar.
6) It's possible for people to do lots of free marketing on their own with the internet. Full service agents aim to do this, but also participate in the marketing that does carry a cost.
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