Over the last few years, the real estate disrupters have figured that the high-tech environment should produce an easier/cheaper way to buy and sell homes. No matter how it’s presented though, the message is clear. We’re hoping to beat the agents out of their commission.
Saving the commission is a noble aspiration and sounds very feasible when consumers run into most agents. Usually they come away thinking, “what do they do to deserve that much commission?” Some consumers get so defiant that they will sell their home without an agent just to be right about not paying a commission – even if they sell for less.
The most famous example here was the blog reader who wanted me to provide him with customized market data – even though he was listed with one of the $500 input services. When I brought it up here on the blog, he got beligerent and raised his price by $300,000, just to show us how determined he was – and this was in early 2022 when the frenzy was red hot:
But 16 months later, he still had not sold his house.
He finally gave up and hired a BH agent who promptly got him a sale over list price:
There is a gap between wholesale and retail pricing that is about 10%. A good listing agent will sell your home towards the top end of the range, and the average agent will sell it for less. The message that agents should be offering is to Get Good Help, because the top agents pay for themselves by selling your house for full retail!
Why can’t a for-sale-by-owner sell for full retail? Because they always price too high, and buyers aren’t as comfortable with the process or the price when there isn’t a good agent involved. You need one or the other – a good agent, or a very attractive price to compensate.
Are homeowners going to risk giving their house away? No, they will just price at full retail and wait until somebody comes along – and we know who comes along – realtors, by the dozens.
The disrupters will put all sorts of spin on it – remember Make Me Move by Zillow?
But none of them are able to change the fact that buyers aren’t comfortable paying full retail unless somebody is there to instill ease and comfort. Price didn’t matter as much during the frenzy, but it matters now, and the best thing any seller can do is to Get Good Help who pays for themself by getting full retail while making the process easier and more predictable for you.
The problem with realtors is that if you run into a slimeball and have to work with them from then on all realtors seem like slimeballs.
Good realtors make everything a breeze and when it’s all done you won’t believe the horror stories other people tell you about real estate at the watercooler.
That’s it right there!
assuming the “The Silver Tsunami” happens and there is a flood of housing inventory, do people really think the boomers are collectively going to sell on their own without a RE agent? The same boomers who can barely send a txt on their smart phone? The same boomers who still refer to video entertainment as “TV”?
I didn’t think so either.
And wouldn’t it have started by now? It should have started ten years ago!
Ten years ago we were already seeing a lot of younger people moving back in with Mom and Dad because they couldn’t afford bubble home prices and rents. Then a lot of boomer nest eggs went poof when the bubble burst. And then Covid had even more kids moving back home. The Silver Tsunami is probably beginning with a lot of boomers’ children inheriting their parents’ homes that they’re already living in with their parents.
Boomers are much more competent when it comes to technology than you give them credit for. For God’s sake, they invented the software and hardware that you use daily. It’s sellers over 75 that have trouble with technology because they still have a Campaq desktop and AOL email. In hot markets, poor agents and discount brokers can sell homes. In a tough market, it takes skill. Don’t mistake brains for a bull market in real estate. You don’t have to be on TikToc, Instagram or Facebook to sell a home.