Are real estate agents really that important?
For Sale By Owner Properties (FSBOs). I'm not here to bash on the renaissance woman or man that is not afraid of a challenge. Someone who is not afraid to get their hands dirty; to branch out and try doing a little trade work themselves to avoid the costs of hiring a professional. I've been there. I've had my dryer spread out all over my garage floor with a YouTube video pulled up on how to replace the heating element.
Did I figure it out? Eventually. Did it save me money? Sure. Probably about $100. And I had the pride of saying that I figured it out myself. Was it easy? Not entirely, but it wasn't too difficult. Does it mean that I am now a certified Maytag technician? Absolutely not. It means that I barely learned one portion of that entire, complicated machine, and saved a little bit of money by struggling through that process. Same goes for a person selling their own home. They are learning one facet of a multi-faceted industry and struggling through that process to “save” a little bit of money (I said "save" because FSBO sales prices, on average, are $65,000 less than Realtor-listed houses. I’ll explain why). But the difference, was that was a $400 dryer. Worst case scenario, I get in over my head and have to hire a pro to come in and clean up after me.
A residential real estate transaction is not a dryer. It’s the swapping hands of real property. Land and all attached improvements. A house, a home, a dwelling. 90% of the population cannot write a check or swipe a card for a house like they can for a dryer. They have to have massive loans, called mortgages, that come from lenders who have underwriters who require proof of income, tax returns, a hair follicle from your first born child that must be pulled on the first new moon of the 2nd fiscal quarter, documentation of every puppy you've ever owned and a dissertation of which one you loved the most and why. The sale of a house is the single largest transaction that most of the population will likely ever make. As far as dealing with an important process, it doesn't really get much more important than a seller's equity (usually the largest amount of money a person ever receives in one check) and a buyer, or family's, home.
We're not talking about messing it up and having to call Maytag and eat some crow. We're talking about the difference of thousands of dollars, possible lawsuits, contract law, inspection process, repair negotiations, title opinions, abstracting, appraisals, dealing with lenders, surveyors, property disclosures, escrow officers, underwriters, and so much more.
I'm also not trying to say that people can't sell their own home, or that they should feel bad for wanting to try it on their own, because that is obviously not the case. And if you've done it, and you're one of the 7% that successfully sold your own home, and you came out mostly unscathed, I congratulate you! You now know that listing, marketing, and selling a home is not a simple process.
I’m primarily just trying to provide some statistics (provided by the National Association of Realtors) to hopefully accentuate why Realtors are still around. If they were not needed, if they did not provide a service or value, then people wouldn't know 11 realtors, on average. These numbers, for me, provide an empirical and definitive answer to the question of whether Realtors are necessary. Here they are, along with the contrast of a broker’s (me, I’m that broker) opinion as to why:
FSBO Stat - FSBO's accounted for 7% of home sales in 2017.
My Response - That’s not a bad number, considering their marketing methods, or lack thereof, as you’ll see later. But 7% is still not a great portion in any scenario that I can think of. You see 7% on a pulse-ox, you’re dead. Definitely isn’t a passing grade in school. If your doctor said they are 7% sure they can save your life, would you let them do surgery? If so, then natural selection was going to sort you out sooner or later, anyways.
FSBO Stat - The typical FSBO home sold for $200,000 compared to $265,500 for agent-assisted home sales.
My Response - It’s because we know how much a home is worth. Because we’re trained on how to find out. It’s because we know the market, we know the area and we have privileged access to the Multiple Listing Service that allows us to go in and search up houses sold within a particular area during a particular time that have the same amount of bedrooms, baths, same kind of flooring, floor plan--even countertops--and compare those to your house and tell you what your house is worth. Sellers sell (pun intended) themselves short, if they do not do the proper research on what their house is worth. If they list it for too much, it won’t sell. And the longer it doesn’t sell, the more of a stigma is placed on that property. People assume that market longevity equates to issues in the house. If they don’t list it for enough, people assume it’s too good to be true, because people (buyers) are informed. And have been hurt before. It's ok, though. I won't hurt you.
FSBO methods used to market home:
FSBO Stat - Yard sign: 22%
My Response - We have those. And they’re much larger and nicer than the corrugated plastic ones you see at Ace Hardware. No offense, FSBOs. It's nothing personal.
FSBO Stat - Friends, relatives, or neighbors: 18%
My Response - We have those. 3,500 realtor friends who all have access to the MLS we post properties in. We ARE the multiple listing service, actually. The MLS is a coalition of cooperating brokerages and realtors who share their listings with an association called the Greater Tulsa Association of REALTORs (GTAR). Thus, the MLS. Plus, my mom shares all of my posts on facebook. So there’s that, too.
FSBO Stat - Online classified advertisements: 6%
My Response - This is a large percentage of our advertisement. Much larger than 6%. Probably closer to 85%. I have a personal website, and every listing that I get that is over $100,000 gets a digital ad created for it with a 7-day, 7,000 impression (view) blitz. All over the internet to people within 15 miles of the subject property who have exhibited the online behavior of someone likely to buy a home soon. It doesn't get much more creepy or targeted than that. And, the ad has a picture of your house and my face and is linked back to the unique website that is made for every property I have listed. That's right. I make your house its own website. Not to mention, your property is put in the MLS and about every property website known to man. (i.e. zillow, realtor, trulia, etc.)
FSBO Stat - Open house: 10%
My Response - We love open houses! If I can’t hold it open myself, I have a bunch of motivated agents that would love the opportunity to hold your house open and help someone purchase it! Also, not only do we do open houses, we advertise the ever living crap out of them! We put them on all of the property websites, the MLS, and we make a 3-day, 3,000 impression blitz for each open house. The same kind of ad and process as the digital ad for the listing. Every single time an open house is done.
FSBO Stat - For-sale-by-owner websites: 5%
My Response - How many for sale by owner websites can you name off the top of your head? I can name one.
FSBO Stat - Social networking websites (e.g. Facebook, Twitter, etc.): 12%
My Response - Yeah, I’m obviously on Facebook. I am a living, breathing person. And I have about 150 fellow realtor friends on there who would be happy to find a buyer for your listing or share my post. Because we are generous, awesome people like that! And, well, we enjoy receiving money. Because we only get paid when we sell something. That's a minor motivating factor. But I like to think it's our generosity, mostly.
FSBO Stat - Multiple Listing Service (MLS) website: 4%
My Response - Yep. The only way to the MLS, is through a realtor. And those limited service brokerages can get a FSBO into the MLS, but that's literally all they will do. And, as a realtor, I"ll make a confession: I dread when I see that. Because that means that a showing is likely much more difficult to schedule, and I don't have a professional salesperson I get to deal with through the transaction so all of my steps are duplicated, for the most part. And for the same amount of money I'd be getting for working just one side of the transaction. Not complaining. Well, I guess I am. But it's my blog so what are you going to do about it?
FSBO Stat - Print newspaper advertisement: 2%
My Response - I'm not upset or surprised by this number. My marketing strategy is primarily digital.
FSBO Stat - Direct mail (flyers, postcards, etc.): 2%
My Response - My number's not much different. I mostly use fliers for inviting your neighbors to your open house. Not so many postcards.
FSBO Stat - Video: 1%
My Response - I have an entire marketing department devoted to selling your house. Literally. And my videographer is the only Zillow-approved videographer in the Tulsa market. And I have exclusive access to him. And he's bald and bearded and friendly and awesome and his name is Kevin. And his wife is with the company, too. She does all of our headshots and agent videos and promotional, warm and fuzzy videos. So if you've ever seen my mug in a video or on a picture, she was the one that made me look fat. Just kidding, Ashton. I blame it on my babies. I'm still working off the baby weight. But yes, we do a drone and walkthrough HD video with professional voiceover and cool, slo-mo, panning shots and fun music. Then I share those on Facebook, my friends share them, you share them, my mom shares them, then it’s game over.
FSBO Stat - None: Did not actively market home: 49%
My Response - Yeah, this is a 0% for me. The digital ads are an automated process that happen no matter what. But I've never not marketed a home that I had listed. I wouldn't not market my home even if I wasn't in the industry. I'm surprised that 49% of FSBO's don't market at all? Come on FSBO's. Get your act together. You're embarrassing yourselves.
Most difficult tasks for FSBO sellers:
FSBO Stat - Getting the right price: 17%
My Response - We sell homes for about 97% of asking price, on average.
FSBO Stat - Understanding and performing paperwork: 12%
My Response - I can almost quote the 7 page contract in my sleep. And the listing agreement, financing supplements, square footage waivers, property disclosures, and so forth. I can even tell you which financing supplemental (OREC or GTAR?) is most beneficial to you if you're a buyer. And vice versa, if you're a seller. I'm not bragging. Very much. Plus, me bragging about a good, working knowledge of contracts and related addenda is probably as cool as when I brag about my minesweeper time. (It's unbelievable, by the way.) Or how fast I can solve a Rubik's cube. It's not "prodigy 7 year old on YouTube" fast. But it's pretty fast. I'm just saying that I know this stuff. It’s been what I eat and breathe for the past several years. And as the managing broker of an office, the primary questions I get from agents are contract or process related. Plus the stuff I've learned during my own sales. Which, I still am an active agent. I still sell stuff. Just, throwing that out there to you. Or your friends. Or family. Or anyone else that might be in the market....
FSBO Stat - Selling within the planned length of time: 5%
My Response - We sell our homes about 20 days faster than FSBOs. Which is a pretty impressive number, considering you’re sampling numbers from 7% and 93%.
FSBO Stat - Preparing/fixing up home for sale: 8%
My Response - I have a stager who is an interior designer and licensed realtor that’s been with my company for a long time. She comes in and talks to my sellers and tells them what they need to do to get their homes photo ready, and has been known to roll up her sleeves and help them while she’s there. Her name is Amy and she’s incredibly sweet and personable and in all her time with the company, she’s never had a single complaint filed against her. How can someone walk into a person's home, tell them everything that's wrong with it, and never piss someone off bad enough to file a complaint? Pretty impressive stuff, if you ask me. But the best part of all of this: it is free to the seller. One more time for the people in the back. FREE STAGING. Do you really need to keep reading at this point? Honestly, I'm surprised you didn't stop reading and pick up the phone and call me to setup an appointment as soon as you read about my prowess in minesweeper.
FSBO Stat - Having enough time to devote to all aspects of the sale: 3%
My Response - Here’s where we shine. As I mentioned earlier, this is what I do. You can’t take phone calls and texts and answer ridiculous questions from people all day on whether you’ll do a rent to own for zero dollars down and $300 a quarter PLUS milk rights to the family heifer. Or what the room dimensions are. Or schedule showings, or any of the other time consuming stuff that comes with putting your house up for sale and dealing with the public. You’re at work. And so am I. It just happens that my work is dealing with all of the stuff you don’t know how to do or have time for.
My name is Zach Oliver. I made this post because I want to help people. It troubles me when I see people not giving themselves a fair shake and devaluing their house, or not answering the phone because they’re afraid it’s another "annoying realtor" trying to list their house. I am not going to call you. I’m going to let you try. And if you need my help, I’ll be ready to assist you. And I’m as judgment-free as a Planet Fitness, so call with any questions you like. Without hesitation, please.
I’m a real estate agent/broker in the Claremore Coldwell Banker Select office and have been in this office since February of 2016. I've been in the industry since 2014, and grew up around it since my dad has been a broker with this company since 1997. I'm a licensed and managing broker as well as a licensed instructor. I teach pre license classes, post license classes, CE, manage an office, and sell houses.
If there’s one thing I’ve learned in the time I’ve spent in this industry, it’s that each transaction presents its own obstacles and challenges. But the difference between those obstacles or challenges when I’m involved vs. when a seller is facing those challenges and obstacles on their own, is that I view them as a fun learning opportunity and approach them with knowledge gleaned through my own transactions or some of the transactions that I’ve overseen as a broker that had similar challenges and a seller is viewing them as a brand new, scary, and imposing threat to their transaction. I have made it my business to know this industry and I take immense pride in everything I do. I am here to help you sell or buy a home. And I love what I do. If you’re needing that help, let me know and we will get started. My number is 918-619-3481.