Pictured: Moaula Ag Lot, Pahala
Many are surprised to learn there are usually no initial costs to list their home. Naturally, there are eventual costs that are normally deducted from the proceeds. Agent commissions are, of course, the largest expense. A close look may help explain what the seller eventually pays for.
Competent agents do extensive research prior to meeting the seller. The process starts with reviewing tax records, permits, the title report and, most importantly, assessing current market trends. Closing cost estimates and a plan for effectively marketing the property should be presented for seller approval.
Once listing terms are set, staging is tweaked, and professional photos are shot. Virtual or 3D tours like this one may be ordered. A QR code is crafted. The property is submitted with photos and supporting documents to the Multiple Listing Service and other websites with which the agent participates. The agent pays a fee for each one.
Traditional marketing plans commonly include flyers, marketing pieces, print advertising, agent caravans, postcard mailings and open houses. Even the sign in front of the house is not free. The updated approach to marketing includes this and much, much more!
In fact, the scope of online marketing and syndication is hugely extensive, layered and labor intensive. Top agents employ assistants to handle these tasks. Even though online marketing is very fluid and ever-changing, the benefits of time invested in online marketing cannot be overlooked. The longer and stronger an agent’s online presence, the better.
We Have an Offer!
When a buyer is found, the agent must carefully evaluate the strengths of the buyer and nuances of the contract. They must coordinate timelines with lenders, Escrow, Title companies, termite inspectors, surveyors, attorneys, home inspectors and insurance agents, to name a few.
Even today, short sale negotiators, foreclosure asset managers and more commonly reverse mortgage lenders can be part of this list. A sale could get more complicated if, for instance, tax or child support liens have been filed against the property.
The Cost of Being a REALTOR®
Like attorneys who are paid when the client wins, REALTORS® are normally expected to “front” all costs to you until you “win”. Costs, exclusive of labor, quickly run into hundreds and even thousands of dollars. The last study I saw quoted the average cost of a listing that did not sell at $1,260. This was years ago, so much higher now.
Public perception is that REALTORS® make lots of money. Truth is, most do not. The national average in 2015 was $44,500 (gross). By the time print ad costs, commission splits, franchise fees, GE taxes, MLS fees, local board fees, continuing education, license renewal and online advertising are factored, the agent is lucky to net 1% of the sales price for each home sold.
This could be broken down monthly or hourly but that skirts the real issue, which for the seller is, whether your agent can afford to provide the services you contracted for until your “case is won”?