BlueMatch lists roughly 68 times more homes than the average volume of a traditional agent on a monthly basis. In doing so, we collect a TON of data. We don’t always execute perfectly and like all humans, we make mistakes. One of the things we believe we do very well though is guide people through a logical journey vs an emotional one. Selling a home can me a very emotional process. In Real Estate, good agents know this and great agents capitalize on it.
The other day I came across an ad on my Facebook feed. At first it made me chuckle and then it made me think. It tugged at my emotional heartstrings and accomplished exactly what the agent wanted it to accomplish. The agent asks a very logical question. The question is then followed up with an illogical fallacy that is meant to tie two uncorrelated data sets/ideas.
When a consumer reads the ad in an emotional manner, they associate low fees with low sale price. It is then followed up with leading questions to reinforce this idea. This ad is actually written very well for what it is trying to accomplish but it lacks data and relies solely on emotional anecdotes.
Here are 4 ways you can avoid falling for the crafty sales pitch and use logic over emotion:
1) If it sounds too good to be true, it probably is
. In most states, agents are required to have you sign what is called an exclusive right to sell. This document is one that BlueMatch strongly opposes but it is a legal necessity. When you sign one of these documents, you are legally obligated to work with that agent for a certain amount of time. This time frame can last over 12 months! If an agent is confident they can outperform the market, ask for an exit clause that lets you out of your contract for any reason at any time. This will force the agent to accurately comp and price your home.
2) Ask for the data!
Real estate functions like any other market. Like stock, homes will usually sell for around what they are worth. If an agent claims they can consistently sell homes for tens of thousands over market value, ask for the data. In markets like Denver and Seattle, homes often sell for over list price and in a very short period of time. Just because an agent sold a home for over asking in XX amount of days does not mean they are beating the market. BlueMatch monitors thousands of MLS listings and hundreds of agencies. We have yet to find any data that shows any particular agent or agency is consistently beating the market.
3) Ask the agent to clearly explain their fees and where the fees go.
In Denver, the median home value is almost 400K and the average agent commission is 2.8%. That’s nearly $11,200 just to list your home. The average transaction man hours at BlueMatch per listed home is about 20. Is your agent worth $560 an hour? Considering heart surgeons earn an average of $266 per hour, you may want to have some very tough questions ready for your agent.
4) Do the math.
Ask the agent to layout the estimated sale price and all fees. If the market price for a home is $400,000 (I would get multiple estimates from other agents and even an appraiser) and the agent is promising you $10,000 more in net gains, they would need to sell the home for almost $422,000. The agent would need to provide you with data that they are capable consistently beating the market appraisal rates (not to be confused with beating their previous list prices) by over 5.3%. If you combine this with the ability to walk away at anytime from your agents exclusive right to sell if they can’t deliver, you have made the logical choice.