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Transcript from Podcast.
Today we are going to talk about what to do when your listing just won’t sell this is a fairly common question I get asked usually after an agent has spent months trying to sell a property for not having luck and the seller is getting frustrated and the sellers putting pressure on the listing agent to make it happen find a buyer for the listing agent might feel like that exhausted all of their options and they’re trying to figure out what they can do so they reach out to me for some ideas so the first thing I usually do is ask the agent a couple questions to analyze the situation and figure out where we’re at the first question I ask is if the agents getting a traffic so in the beginning of a listing usually there’s always traffic everyone’s curious there’s a new property on the market in the area it has very few days in the market everyone’s going to take a look or most people are going to take a look well traffic naturally kind of Fizzles after a while for the question is if you’re a month or two months into having your property listed and you haven’t received an offer yet has traffic died completely is it crickets or is there a little bit of traffic that said only trickles through this is an important question so if the answer is yes that there is traffic let’s say we’re 60 days plus into this listing and there are still agents coming through and showing your listing to Byers then I would say what are these agents in because no agent should go through your listing without you as the listing agent calling that buyer’s agent and asking for feedback and asking for candid feedback because a lot of buyers agents if they get a call from a listing agent they’ll say something like oh my buyer liked it but they’re considering a few different options will get back to you or will let you know if that we’re going to ride well that’s not very helpful to a listing agent it’s just kind of a pleasant courtesy and not true critical feedback like quite frankly your listing is dated and looks not in a very presentable condition relative to other listings in the area your listing doesn’t have blank when all the other homes in the neighborhood do my buyers money goes further with other homes could buy I mean that’s a sort of critical feedback That’s essential and one of the main reasons why critical feedback is essential is if you was a listing agent start telling a frustrated seller that all these opinions and reasons that you have while their property isn’t going to sell it less effective then if you get that feedback from buyer’s agent should have come through because if you can tell the seller that out of however many buyers agents came through they’re all saying the same thing that all the same critical feedback they’re all telling you or there’s a pattern that they’re telling you that the property is overpriced and there’s some issue with it they don’t like they don’t like that it might backup onto another sort of property or something loud like a freeway or whatever the characteristic might be that makes the listing less attractive if you take that information to the seller then it doesn’t put you in the position where the seller looks at you like you’re the problem you’re the negative person because let’s face it listing agents have to be Optimist listing agents get listings by telling a seller that they’re going to give to get that seller the top of the market price the highest value excetera they go through the house and they compliment the seller on him how nice the upgrades and the work that the sellers put into it is and I see a lot of agents are consistently busy by just overpricing properties and that’s part of the whole optimism that listing agents have for better for worse that’s just a characteristic that successful listing agents have their very optimistic with their sellers about price about condition and then when reality sets in they and they may not get that very high top of the market value then they’re also good at talking with their clients their sellers about when to do a price adjustment without causing me sort of awkward tension between the listing agent and the cellar because the listing agent just says you know what seller I think that you’re asking too much we need to reduce and there’s no sort of evidence backing up that listing agent suggestion the seller is going to look at the listing agent like okay you were up what’s going on that same spark that same attitude that you had its kind of diminishing why is it just not easy for you so instead you’re going to just have me lower the price and receive less money to make your job easier or you going to really Market my property so if you if you have feedback from all these buyers agent to come through these aren’t your words of negativity you’re just passing the message so you can say something like look I’ve talked to ex number of buyers agents have come through and these five of them said all had an issue with the price and I took that feedback and I did some market research and I see that if if you’re a buyer that has x amount of dollars to spend in this neighborhood well that house down the street just went pending is bigger for the same price that you’re asking and the other house down the street is bigger and has a pool and yours doesn’t but you’re asking more than that house and then your reframing the sellers thinking so the seller understands that from a buyer’s position if they go into a neighborhood and they have a certain budget how far will their money go because every cell even agents that are experienced to sell their own homes have this problem it’s the seller delusion where you know as a seller firsthand all the work that went into a property you know. When you get a choice to use a better product or a more expensive product when you were doing renovations you chose a more expensive one there for your your property has more value well somehow or another through thinking like that the seller just sees of course the top of the market value for their property right and actually if you own an asset you want to get the most you can when you sell it it just common sense so is this as the listing agent you also need to break through that seller delusion of getting the absolute most money you can for your property and bring that seller back down to Reality by using empirical data and Imperial data is the buyer agent feedback that I’m talking about so you can follow up with these agents and take notes the more diligent you are the better case is going to be because you can come in as this optimistic listing agent and say look we’re testing the market we have buyers coming through here’s their feedback and it’s going to be critical and it’s going to be negative and you have to tell them haters going to be negative you can just tell the seller and let the seller decide the less of your negative opinion that you that you input into the conversation the better really you’re just trying to convey a message that there’s a pattern so the seller can come to their own conclusion because if you start telling the seller I’ve concluded your overpriced and you need to reduce then the seller will look at you like you’re the problem and you’re not because let’s take a step back and look at listing and selling a property and you’re you’re the reason why you’re not the problem at this point in listing real estate as an agent we’re in the internet age everyone’s looking online everyone buyers are looking on their own through consumer sites like zillow.com and realtor.com and you name it there dozens and agents are looking on the MLS and a molasses indicating that data to all these consumers sites so so homes are bought and sold through the internet they’re discovered on the internet through Discover online and then an agent facilitates the sale that’s the reality of it there are rare cases where someone drives by and sees a sign and there are cases where someone wanders into an open house but those are anomalies those are not the standard standard is at when someone wants to buy a home they have the laptop and they’re sitting on the couch in the evening and they’re looking on all those consumers sites and their finding properties and are emailing to the agent and the agent is probably emailing listings to the buyer or is create an automated search in the MLS so that the buyers aware of any any listing it comes available I mean I’m shocked at somebody’s buyers how diligent they are because I knew listen to become available and in almost real-time from the from the moment that a listing agent upload the listing to the MLS it’s been syndicated to a site like realtor.com and then the were the buyer is going to get an update on their on their phone or whatever app they use that they’re doing their search with and so I’ll tell the agent hey it’s just 2 hours ago can I see it in the agents thinking oh my gosh shut it mean it’s impossible to compete with buyers that have access that same data so so getting back to the point here homes are sold through exposure online that’s how people are looking now being a listing agents competitive when you’re doing the listing presentation you’re promising all these different marketing efforts to the seller you’re telling the seller going to do open houses you going to do a mailing campaign you’re going to post on social media the reality is those for the most part have a negligible effect in fact mailing a new listing flyer to the whole area is more beneficial as a marketing material for the listing agent then it is to exposure to the home in the old days that worked in the pre-internet days with the days of door knocking and the days of the MLS being on an old computer that buyers and have access to before data was in the kid sure you wanted as much exposure as possible so naturally to send Flyers out was one more way to tell everyone locally that hey this is for sale if you or someone you know is interested let me know but no one’s looking just at Flyers right people are looking online that’s where everyone’s looking and buyers are funding their own listings for a while buyers would come into our office and walked by my office and if I bumped into buyers that might have been in the office for whatever reason I would ask them hey just curious did you find your listing or did your agent send it over to you every single one told me they found their listing and notified their agent about it and this is over a two-and-a-half-year. With dozens of buyers obviously that’s not the best Market sample but just saying that a lot of buyers and I believe the large majority of buyers are fighting their own listings so my point all this is not most of the other stuff that you do as a listing agent is kind of a dog and pony show to show the seller that you’re breaking a sweat and you’re earning your commission so when listing agents are having trouble selling their property they start thinking they need to do more of the dog and pony show to somehow bring a buyer out of the woodwork and I would say don’t confuse that sort of minutiae of these book. The book emails to other agents with a listing hey here’s my new listing come bring your buyer to me is just such a waste of money and time really what it comes down to is are you getting proper exposure on your listing if your listing is on the MLS and it’s being syndicated to all these consumers sites and you have a real estate sign in front of your listing or in the window of your condo listing or somewhere so that people can identify where it is the property is getting plenty of exposure if your MLS indicates always consumer sites and you’re on the local unless you’re getting overwhelming exposure the problem and this is ultimately where I think all roads lead to when a listing isn’t selling is price and people will give me reasons like well this property is in really bad condition it was Trashed by the former owner and insides is disgusting or has this problem with that problem okay that’s a reason but it’s the price right because someone will pay some price for that property maybe not the price that you’ve had it listed at for 2 months but they’ll pay someone out there will pay something and that goes for properties that might back up onto a freeway or have giant power lines behind them or if all the little characteristics that make properties less attractive it all comes down to price again those characteristics that make properties less desirable they affect price but price is the reason if you drive along the freeway and you’re looking at these homes that are facing some huge freeway with seven Lanes on each side someone is paying for those properties of people are living in them and it may not be as much as the street that’s a half a mile into the neighborhood half a mile away from the freeway right there’s a price adjustment for these homes have backup onto a noisy stinky freeway but someone is paying for it so all roads lead back to price and price is that sensitive such a listing agent to The Optimist that is guiding the sellers of the process it’s a very touchy subject because again if you just say hey seller your property is not selling let’s reduce the seller feels like they’re having a subsidized your inability to bring a buyer to their listing which is not the case right when needs to happen is you as an listing agent you need to gather that data from all of these buyers agents that have toured and you need to tell the seller look here’s the common feedback that we’re getting from these buyers agents and again this is why it’s so important to talk to his agents and when they give you that that nice courteous and answer about why their buyers are interested or they may come back you need to puncture through that veil of politeness and ask them for critical feedback say okay if there’s one what’s what’s the most unattractive characteristic or feature of my listing minis are questions that you need to ask to probe the buyer’s agent to give you critical feedback and then you need to take notes and used to deliver these reports to seller understand this isn’t just you quote unquote giving up your not really giving up the seller just looks at that way when things get tough and you don’t bring a a buyer no buyers are showing up so the bottom line is all roads lead back to price and that’s a conversation that you have to have with the seller and that conversation should be predicated on empirical data which is feedback from people that have come through and I would add on in addition to offering that critical feedback from buyers about why the properties and selling do market research look at the MLS on a consistent basis and put yourself in the shoes of a buyer and look at your listing whatever your listing prices and do a search do a search a half-mile out or even a full mile out of active listings that are that where the max price is your listing price and then see what how far your money will go so if your listing is 900000 put 100,000 in into the area half mile outer where we need to go in the area and see see what how far your money will get you how much house 900,000 will buy because that’s what fires are doing right they want the most for their money and if you look and you see that your properties and selling and other properties have gone pending offer more for the money and that’s that’s very common sense as to why your listing isn’t selling again it’s really about building a case of explain to your seller to be realistic because if you’re getting this out of the exposure holding holding 30 open houses versus 15 is not going to find you a buyer or doing some sort of other marketing campaign or posting on Facebook or doing these desperate tactics like sending a postcard campaign to 500 of the closest neighbors or sending a book email blast to other agents again total waste of time just so absurd agents have buyers are looking online Loki on the MLS everyone’s looking online that’s how properties are sold nowadays so in conclusion remember that all roads lead back to price someone’s willing to pay a price for the home it doesn’t matter how bad the condition doesn’t matter if some hideous crime happened in the home doesn’t matter what the situation is similar to pay the price and if you’re getting that property. Bossier having it online on the MLS syndicated to all the consumer sites then you are you’re putting it in an open-market setting where a pool of buyers the market can determine what they’re willing to pay in conclusion ask yourself as a listing agent are you getting showing still are you getting any traffic even if it’s slow or you getting just crickets if you’re if you’re not getting any showings it’s likely that you’re very overpriced very overpriced remember because even the conditions terrible even if your MLS pictures are just show all sorts of problems in damage though there are properties there that are in terrible condition and they’re getting traffic because they’re priced accordingly so if you’re getting no traffic at all you are very overpriced now if you’re getting slow traffic then make sure we’re getting feedback from the agents lots of empirical data to make the case to the seller that there’s a pattern as to why buyers are not making an offer there’s a common factor in a critical feedback so that you are simply delivering what the market is saying the market has spoken you’re delivering the message rather than appearing like you’re giving up and asking the seller to take a financial hit and reduce cuz that’s what happened it’s unfair to the listing agent but it’s just the reality of it when you get that empirical data bring that back to the seller put yourself in the buyers shoes make a case against deliver more data more evidence to the seller as to how much how much home the list price will get a buyer because the sellers home is competing with other listings so knowing that your listing is in competition with whatever else is available in the neighborhood it’s crucial that you always check in and see how much home a budget equal to the listing price will get a buyer because buyers naturally are going to get as much home as they can for their money and that’s what your listing is competing with it’s really a matter of informing the seller so they can arrive at their own conclusion in terms of getting realistic about what the value of their property is I know that having a sort of conversation about price and having to do an adjustment is not the answer that most agents want to hear usually they’re hoping that there’s a Magic Bullet or there’s some sort of strategy that they haven’t thought of that perhaps myself another agent knows of the they can tell the listing agent to magically get a property sold but at its core selling real estate is actually not that complicated like any asset or good the seller needs to get as much exposure to the largest pool of buyers possible and those buyers are going to deliver a fair market value offer based on how valuable that asset is I hope you found this episode informative and I appreciate you for taking the time to listen thank you
Transcript from the podcast episode:
Greetings agents. I’m using a different microphone this time to eliminate that creepy background noise that was in the first recording, so hopefully the audio quality is better. We’re still testing things out. All right, so the topic of this podcast is how to get paid directly from escrow and what we’ll do is look at a typical scenario, the traditional scenario and then the difference of being paid directly from escrow. So in a standard scenario, the escrow is going to send the check to the real estate office and escrow companies typically overnight it, but I’m seeing more and more of snail mail and letters with commission checks in it. I don’t know why. Probably asked for companies are trying to cut costs either way, the check arrives here at the real estate office. Now when the check comes in the same day, we scan that check and we send a copy to the real estate agent so they have a record of it and provided the paperwork is done.
We immediately cut a check to the agent and what I do almost daily is drive these these letters down to the post office. The reason is that there’s a noon pickup at the post office, there’s a 5:00 PM pick up at the post office. I just think things get processed faster down there and it kind of expedites the whole, the whole process. I know that dealing with correspondence all the time with different real estate companies and then mailing us checks, sometimes someone will say, oh, we mailed it such and such day and then it takes several days to arrive and I’m just imagining someone taking a a letter and putting it up, you know, at the front desk and then that person might take it down maybe that day or maybe the next day and maybe they take it down, mail it at 2:00 PM but the mail carrier comes through at 10:00 AM and so now it sits in the office park mailbox for a day or God forbid this happens on a Friday or sits there a whole weekend.
I just don’t like those delays and that’s why I personally take our mail down to the post office to make sure that it goes out. When it does, it arrives very quickly at the agent. So that’s what we do in a traditional scenario. And already there we are much faster than other brokerages, but there’s a faster way. And I know that agents want to be paid as fast as possible. It’s common sense, right? And agent’s worked for weeks, probably months with or with their client. They’ve done all this work, they haven’t been paid yet. Now the property is closed, the transaction’s closed. Why would they want to wait any longer if they don’t have to? So there is a faster way and the faster way is being paid directly from escrow. Now here’s how it’s different. So the broker signs a commission instructions in escrow.
And then what we provided that the agent’s paperwork is squared away. We send a CDA commission disbursement, authorization to escrow signed by an officer of the corporation. In this case myself, and this instructs escrow to split the check, due the brokerage. So the brokerage will receive a portion, Balboa real estate. And then of course the agent will receive their portion do. And, and that of course cuts out all the time of escrow, having to send a check to our office and then our office having new cut a check and send it back to you. So I mean it, it’s not a huge amount of time. It cuts a cut out of the process, but a solid couple of days at least I would say. Now here’s something to consider. In order to have a CDA done, a couple of things have to happen. Number one, the file must be complete in advance to recording.
So what an agent should do is go to www.turbotransaction.com, make sure they have their paperwork in there and then before the escrow records, towards the end of the transaction, the at the agent’s going to click a button, the green submit complete file button, and that’s going to send a notification to the office that that the file needs to be reviewed. And then someone at the office will review the file and send an email back to the agent. Now if there are missing items, the email is say, dear agent, your files missing, document x, Y, and Z, please upload and click that green button again to let us know that you’ve been in there and you’ve updated the file or you’re going to get an email. Dear agent, thank you. Your file is complete if you get the complete email, then you have the green light to go over to Balboa team.com/CDA so it’s our company URL forward slash, CDA.
That’s the commission dispersement authorization I was talking about and in there there are fields that you fill out so that we can create a CDA that instructs escrow to to pay you directly. Now there are a couple policies that have changed over time. We used to not have that CDA page on the website, but I added it because I wanted to avoid any sort of misunderstandings in terms of what the gross commission is or how much the agent expects to receive and all of those terms have to be addressed on that page. Second, I’ve actually instructed our office administrator to send out a CDA. Two with the agent as well to have the agent initial the CDA because again, I don’t want there to be any surprises. The process needs to be transparent the whole time. So then we send that off to escrow. Now it’s important to note that the file must be complete in order to get this CDA.
The reason is that the file is incomplete and the commission’s been paid, then it’s very difficult, very difficult to get those outstanding documents. We essentially become like bill collectors here and this is just something that we’ve experienced firsthand through trial and error over the years. I mean, a lot of what works at Balbo works well because we’ve done trial and error and those of you that have known the company for years and years, you’ll, you’ll know that our commission plan has changed over the years. Little things have changed always for the better. And, and that’s based on trial and error. What works and what doesn’t, what causes problems, um, and what, uh, makes things run smoothly. So there you have it. That’s what you need to do. Just make sure your paperwork’s in order. Now there’s another thing to consider that is if you use an inhouse transaction coordinator, you are always entitled to getting a CDA.
Why? Because again, that that compliance factor of paperwork, we know how it’s been addressed with the Trent, with an in house transaction coordinator word we’re taking, we’re assuming all that responsibility of document collection and your outsourcing the paperwork, right? You’re having another trend, you know you’re having a transaction coordinator step into the do all the leg work for you. So the paperwork should be as good as done. And if we’re the company, assuming that responsibility, it’s as good as you’ve submitting a complete file in, in, in our eyes. And so for that reason, you’re entitled to a CDA. So the transaction coordinator is going to offer a CDA to you if, if you want to be paid directly from escrow. So keep in mind that if you use an inhouse transaction coordinator, you also can, can get a CDA, your files as good as complete. All right, I think that will conclude today’s episode. Thank you.
Which 100% Commission Real Estate Company Pays the Fastest?
At Balboa Real Estate, if your file is complete at closing or you use our in-house transaction coordinator then you can be paid directly from escrow at closing. Otherwise, escrow sends a commission check or wire to the office. In the many years that I have managed Balboa, I know that agents like to be paid as soon as possible. If we get agents their commission fast, then they appreciate it. Maybe some don’t notice when it comes fast. However, every agent notices when it comes slow.
Many companies send checks slowly as a matter of convenience. For example, it’s easier to go online and have your bank issue the check for the brokerage. It saves the headache of printing a check, signing, stamping and mailing. The drawback is it can take days, often over a week. This does not make agents happy. In contrast, when we receive a check it’s a hot potato that needs to be accounted for and then issued to the agent as fast as possible. Cutting checks is our top priorty for our interal operations.
Have you ever had someone tell you they were putting a check in the mail and then it still takes days to arrive? This is the type of situation when someone walks out to the office park mailbox, after mail has been picked up for the day, then takes credit for mailing it that day. Meanwhile the check sits in there until the next pickup. At Balboa Real Estate we calculate the pickup and delivery times. This often means making trips to the local post office because the office mail has been picked up and we want the mail to go out that same day. In urgent scenarios, we make trips to the post office so that we can get a commission check out by the noon pickup. Despite having nearly 200 agents on the team, we operate at the same capacity as a small shop with a few agents – considerate and speedy service for agents.
To find our more about our 100% commission real estate program, please CLICK HERE
Avoid the top mistake agents make on a referral fee agreement.
It all begins as to how the referral fee agreement is structured. The form stipulates the fee to be paid to the referring broker is based off of the gross commission earned. Now, this verbiage is important and necessary because it protects the referring broker. Imagine if the agent that received the referral had a terrible broker split or some sort of debt that would take a big bite out of the gross commission. Well, the referring broker should be subject to the arbitrary fees incurred by the recipient agent. Therefore, the referral fee should be calculated based off the gross commission. All this works well and fine until an exception comes up. An example would be a problem in the transaction where the recipient agent has to contribute a portion of their commission to save the deal. Another example would be if the referred client turns on the agent and tells them they want a rebate or else they will go to some discount outlet like Redfin. Well, an agent will usually chip in commission if it saves the transaction. Especially, if that agent has invested time working with that client.
Let’s imagine a made up scenario to show how it all goes wrong.
The referral fee agreement stipulates the recipient broker has to pay 25% of the commission to the referring broker.
The recipient agent has a 70/30 commission split with her broker.
The recipient agent has to agree to chip in $3000 to save the deal. So she assumes the 25% referral fee will be based on the $7,000 commission reamining after she credits her client. This is a reasonable mistake. After all, her 30% broker fee will be calculated off the $7,000 not the original $10,000 gross commission. Only at the end does she find out that her broker is obligated to pay $2500 to the referral broker off the top. So, the new gross commission left for her is $4500. Then she has to pay the broker fee of 30% ($1350), which leaves her with $3,150. Naturally this agent will be unhappy because they did the majorty of the work for 31% of the gross commission. To prevent this one of two things should happen:
- The Referral fee agreement should stipulate that any credits or rebates to the buyer must be deducted from the gross commission in which the fee is calculated.
- The referring agent is contacted and made aware of the need to credit commission to the save the deal and then add the verbage from line 1 or recalculates as flat fee amount to be paid as the referral fee.
If you are interested in the 100% commission model and working with a broker that has the foresight to protect you from scenarios like this then please CLICK HERE for more information.
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