The Listing Agent – Marketing Your Home to Other Agents

The Multiple Listing Service

Even before the sign is up and the brochures are ready, your agent should list your property with the local MLS (Multiple Listing Service). The MLS is a database of all the homes listed by local real estate agents who are members of the service, which is practically all of the local agents.  Important information about your property is listed here, from general data such as square footage and number of rooms, to such details as whether you have central air conditioning or hard wood flooring. There should also be a photo, and a short verbal description of what makes your house “special.”  Agents search the database for homes that fit the price range and needs of their clients. They pay special attention to homes that have been recently placed on the market, which is one reason you get a lot of attention when your house is first listed. Many agents will want to preview the home before they show it to their clients.  The main point about having your house listed in the MLS is that you expand your sales force by the number of local MLS members. Instead of having just one agent working for you, now you may have hundreds or more, depending on the size of your community.  The listing agent’s main job to make sure that the other MLS members know about your house. This is accomplished through listing your house in the Multiple Listing Service, broker previews and advertising targeted toward other agents, not home buyers.

Office Preview

If your listing agent belongs to a fairly sizable office, an “office preview” will introduce your house to other agents working in the same office. In effect, they get a “head start” on selling your property. Once a week, the office’s agents will get together, share vehicles, and “caravan” to all of the new listings. They generally pull up in front of your house at about the same time (some even use a bus) then file quickly through your home like some bizarre “follow the leader” game.  It can be amazing to watch.  They go through very quickly, since most of them are familiar with similar models of your house. They are usually looking for anything memorable or different and to determine if your house is one they would be proud to show their clients. Then they all pile back into their cars and move on to the next house on the tour.  But some of them come back…with buyers.

Broker Previews and Culinary Delights

Broker preview is very similar to an office preview, except it is open to all the members of the local multiple listing service. It usually occurs within the first week your house is placed on the market, just after the office preview. However, there are lots of new listings to choose from, and not all the agents preview all the new listings each week. You may not get as many agents visiting your home as there were on the office preview.  Unless your agent “entices” them to come. This is where you could provide some help, if you are so inclined.  Though it may seem funny, nothing seems to attract a real estate agent like the offer of free food. So if your agent offers “free eats” at a broker preview, you are likely to get more visitors than if nothing is offered. Realize that many agents have been on this weekly circuit for years, so “boring” food does not really accomplish much. In other words, sandwiches supplied from the local grocery chain are not very enticing.  If you want to help your agent sell your home quickly, try and help them be creative and original in the choice of a culinary treat.  Of course, some agents will actually come to look at your house, too – whether food is offered or not.

Office Flyers

Your agent will undoubtedly prepare flyers about your property so that prospective home buyers can be informed about the attractive features of your house. These flyers (or similar ones) should also be sent to all the local real estate offices, too. Most areas have a weekly flyer service that delivers advertisements to all of the local offices. Since agents get these flyers every week, they do not always look at them. However, a large percentage of them do. Some agents will keep the flyer and bring buyers to your house.  The flyer should be done professionally and photocopy well. Ask your agent to show you copies of office flyers they have done in the past.

Marketing Sessions

Your agent probably belongs to a local association of Real Estate Professionals and they often have meetings once a month. At these meetings there is often a “marketing session” where some agents stand up and tell about their listings and other agents stand up and tell about their buyers. Your listing agent has an opportunity to “pitch” your house at these marketing sessions.  At the same time, these sessions may not be as effective as they were in the past. One reason is that they are often more social occasions than serious business meetings. Another reason is that, as technology has expanded, local associations have tended to merge and create larger Multiple Listing Services and Associations. Local meetings have become poorly attended gatherings.

The Listing Agent – Preliminary Marketing of Your Home

The “Real” Role of a Listing Agent

When you bought your home, you probably used the services of a real estate agent. You found that agent through a referral from a friend or family member, or through some sort of advertising or marketing. The agent helped you in many ways and eventually you found the house of your dreams, made an offer, closed the deal, and moved in.  For whatever reason, now it is time to sell your home and you need a real estate agent again. Many home sellers, especially those selling their first home, tend to think all agents are similar to the one that helped them buy their home.  Although real estate agents can (and do) work with both buyers and sellers, most tend to concentrate more on one than the other. They specialize. When you bought your home, you probably worked with a “selling agent” – an agent that works mostly with buyers. Because of the nature of real estate advertising and marketing, the public’s main image of the real estate profession is that of the selling agent.  As a result, many homeowners expect their listing agent to do the same things that a selling agent does – find someone to buy their home. After all, they do the things you would expect if they were searching for buyers. A sign goes up in the front yard. Ads are placed in the local newspaper and real estate magazines. Your agent holds an open house on the weekend. Your house is proudly displayed on the Internet.  But this is only “surface” marketing. More important activity occurs behind the scenes. After the “for sale” sign goes up and flyers are printed, your agent’s main job is to market your home to other agents, not to homebuyers.

The “For Sale” Sign

It seems fairly obvious that when you put your house up for sale that your agent will put a “for sale” sign in the front yard. The sign will identify the agent’s company, the agent, and have a phone number so prospective buyers can call and get information.  Signs are great at generating phone calls, even if very few actually purchase the home they call about. However, you might be one of the lucky ones. For that reason, you should determine what happens when someone calls the number on the sign. Does a live person answer the phone or does the call go to a voicemail or recorder?  You want someone to answer the phone while the caller is “hot.” When buyers call the number on the sign, the call should go to a live person who can answer questions immediately. A potential buyer may be on the street outside your home, placing the call using a cell phone.

Flyers and a Brochure Box

Your agent should prepare a flyer that displays a photo and provides details about your house. There should also be a phone number so buyers can contact your agent to get additional information. The flyers should be displayed in a prominent location in your home and also in a brochure box attached to the “for sale” sign.  The brochure box is convenient for those buyers who drive by and just happen to see the “for sale” sign in front of your house. It provides enough information so they can determine if they want to follow up with a phone call or inform their own agent they are interested in your house.

Listing Commissions and Related Issues

Are Commissions Negotiable?

In some areas of the country there is a certain percentage that real estate agents expect to earn as a commission.This commission amount is a certain percent of the sales price.Or, some companies will charge a set fee for their services.However, just like anything else in real estate, this amount is negotiable.When completing the listing agreement, you and your agent will agree on the amount of the real estate commission.

Cut-Rate Listing Commissions

With the advent of the web, a lot of agents are offering “cut-rate” commissions. Most of the time, lower commissions are tied to a lower level of service. If all you want is to be listed with the Multiple Listing Service and a sign in the front yard, then a cut-rate commission may be right for you. If you want an agent who will actively promote your property to other agents and spend money on advertising, then you probably are not going to get that level of service with a reduced commission. At other times, the lower commissions are offered when you agree to tie in to other services offered by the broker, such as agreeing to use a specific lender, escrow, settlement, or title company. The broker (not the agent) will probably have some type of ownership or profit participation in those businesses. The problem with agreeing to tie in to these other companies is that they do not have to be as competitive in pricing their products or services. Another common practice when you see an ad for a reduced commission is that the compensation is lowered when you agree to buy your next home through the same agent or broker. Usually, the reduced commission is not really being offered on the sale of your existing home but on the purchase of your next one. The ads are usually unclear on this. As a result, when you see an offer for a lower commission, you should analyze what you are giving up by accepting such an offer. It probably will not be readily apparent in the advertisement. Be sure to ask lots of questions.

How and When Listing Commissions are Earned

Your listing contract specifies a listing price. Your agent’s job is to bring a “ready, willing and able” buyer to present an offer. If you reach agreement with the buyer, then the agent has done his job and earned the commission. Once the sale has closed, the real estate broker gets paid from the proceeds of the sale.  If the buyer proves unable or unwilling to conclude the sale, the house is placed back on the market and the agent has to begin earning his or her commission all over again.  However, if the seller backs out or does not accept an offer that meets the price and terms of the listing agreement, the listing broker has still earned the commission. They may want to be paid, even though you did not actually sell your home. Therefore, it is very important to carefully consider every detail when completing your listing contract and accepting an offer to buy your property.

“Hot Market” Under-Pricing Sales Technique – Commission Issues

During a “hot market” there is a certain marketing technique which, though very effective, could cause trouble because of the way the contract is written. This is the practice of “under-pricing” the home. In a hot market, a home that is under-priced gets a lot of attention from other Real Estate Professionals, and they all start showing your home to their clients. Often, you get into a situation where multiple offers are presented and the price starts going up because of the frenzy. You end up selling the house above your asking price and perhaps above what you could have received if you had priced it traditionally.  However, the technique does have the potential to backfire, so you should build safeguards to prevent having to pay a commission “just in case.”  You see, the listing contract usually states that if an offer is received that meets the terms presented in the contract (including price), the real estate agent has earned his or her commission – even if you decide not to sell. A reputable agent would never attempt to collect a commission if they were using the “under-pricing” technique and it backfired, even if they are technically entitled to one. For that reason, in the “additional terms” space on the listing contract, you should specify your true target price – when the agent has really earned the commission.

Details of a Listing Contract

Obviously the name of the seller and the property address will be included in the listing contract. There are many other things that are included, too, and you should be aware of them.

Price and Terms of Sale

When setting the terms of sale, the main thing you are concerned with is the price. You should have a basic idea of what your home is worth by keeping track of other sales in the neighborhood. Plus, you have probably interviewed at least two real estate agents and they have given you their own ideas. Exercise great care in determining your asking price, making sure not to set it too high or too low.  In addition to the price, you will disclose what personal property, if any, goes with the house when you sell it. Personal property is anything that is not attached or fixed to the home, such as washers, dryers, refrigerators, and so on.  There may be some item that is considered “real property” that you do not intend to include in the sale. Real property is anything that is attached to the home. For example, you may have a chandelier that has been in your family for generations and you take it from home to home when you move. Since the chandelier is attached to the house, it is considered “real property” and a reasonable buyer would normally expect it to go with the house.

Lockbox – Yes or No?

A lockbox is a basically a padlock with a cavity inside where a key to your home can be placed. Only someone with an electronic key or the combination can get into the lockbox and access the key. Having a lockbox available at your house makes it easy for other agents to get access to your house.  Without the lockbox, agents representing buyers would have to set appointments to meet you or your agent at the house so they could gain access and view the home. This would be inconvenient. Since almost every other house does have a lockbox available, if you do not allow one most agents will simply not show your property. You will miss out on lots of potential buyers.  The listing contract specifies whether you allow a lockbox or not. It is locked into place, usually on the front door and cannot be removed. Only other agents can access the key that is located within the lockbox.

Real Estate Commission

In some areas of the country there is a certain percentage that real estate agents expect to earn as a commission.This commission amount is a certain percent of the sales price.Or, some companies will charge a set fee for their services.However, just like anything else in real estate, this amount is negotiable.When completing the listing agreement, you and your agent will agree on the amount of the real estate commission.

Multiple Listing Service

Your listing contract should specify whether or not the house will be listed with the local MLS (multiple listing service). It is definitely in your interest to have the house listed. This is because your sales force is automatically multiplied by however many agents are members of the local MLS. If your house is not listed, then you only have one agent working for you instead of many.

Agency Duties of a Listing Agent

The listing contract will specify that your agent is acting as a “seller’s agent.” This means that, in the sale of your house, they are working for you and only you. However, there may be times when your listing agent has a client who wants to buy your home. For that reason, there is a little “wiggle room” in the listing contract. If your agent also represents the buyer, the listing contract should specify that they provide an additional disclosure that details their duties as a dual agent.  The contract also provides permission for your listing agent to act as an agent for others on other transactions. They can continue to list other properties, and represent buyers looking at other homes.

Resolution of Disputes

There are times when you and your agent have a disagreement that you cannot resolve by yourselves. Maybe the agent did a poor job or misrepresented something. Maybe your agent was really doing their job correctly, but you did not understand. Perhaps the agent will have a dispute with you.  The listing contract specifies what methods will be used to settle such disputes. You can choose to accept binding arbitration, which is usually cheaper than hiring a lawyer and going to court. Usually, matters that can be dealt with in a small claims court are excluded from having to go to binding arbitration.  You are not required to sign or initial the binding arbitration clause.  This would leave you free to hire an attorney and pursue disputes in civil court instead of binding arbitration.  Consult your attorney for advise on this legal matter.