Commission discounts can bring sellers out of the woodwork

Broker Notebook

The market has indeed shifted. But this isn’t anything like the shift that happened when the housing market crashed, and we entered the Great Recession and housing depression.

This market shift had been a positive experience. Prices are rising, but are well below the peak that we hit during the housing bubble.

Incentive image via Shutterstock.
Incentive image via Shutterstock.

We put a home on the market and it sells in a week or less after the sellers choose the offer they like the best. Sure, there are still overpriced homes on the market that are not moving. After all, this isn’t 2005. Even if an overpriced home gets an offer, the appraiser isn’t going to go along with it.

Marketing listings is fairly easy. Sometimes listings sell before I get all of the marketing done.

They are purchased by buyers who are working with real estate agents, and the buyers or their agents find the listings through our MLS, or one of the thousands of websites that have local listings on them.

Marketing listings is not the biggest challenge right now, as it was a few years ago. Neither is attracting buyers. The biggest challenge is attracting homeowners with equity who want to sell.

I have participated in a few multiple-offer situations. For some of my buyers I end up writing more than one offer. Right now I find myself working exhausting 10- to 16-hour days, six or seven days a week, with no end in sight. I am chasing after homes for my preapproved, motivated and wonderful homebuyers whom I honestly love working with.

I struggle to have any listings on the market at all. If I’d been a real estate agent 15 years ago, I probably would have had a hard time attracting buyers without having any listings.

Today I am able to attract a steady stream of buyers by writing content for my blog each day, and through referrals from past clients, friends, family and neighbors. But getting listings has to be my No. 1 priority, unless I want to spend 23 hours a day in my car working with buyers.

This week I have one new listing going on the market and three listing appointments. Here are some of the things I am doing to attract more home sellers:

1. Writing more blog posts for sellers and sharing them through the social media channels.

2. Going back to homeowners who contacted me in the last few years but who decided not to sell because they were upside down on their mortgage. Many now have equity and haven’t listed with another agent.

3. Sending postcards to the owners of homes that I listed years ago. In many cases, the agents who represented them when they bought the homes are no longer in the business.

4. Looking at expired and canceled listings, sometimes going back a year, and reaching out to homeowners who may be too discouraged to call an agent but who would like to move.

5. Offering some homeowners discounted commissions.

Yes, you read No. 5 correctly. While I am not positioning myself to be a discount broker, my overhead costs are very low. There is no opulent office or national franchise fee. My business runs on the Internet. Many of the tools I use are cheap or free, or provided by our MLS. The MLS isn’t free, but it is inexpensive.

Even my gasoline and vehicle costs are low, as I work in a fairly small geographic area and I can bike or walk to our office or the local collaborative.

I can pass my savings along to my sellers, and still provide them with the highest level of service including professional photography and plenty of agent networking.

In some cases, even a small reduction in commissions gives homeowners who want to move but have little equity the incentive they need to put their homes on the market. Those sellers tend to be very happy when their homes sell, and happy sellers are good for business.

The real estate market has cycles. Right now, we need more inventory. As an agent, I have to listen to the market and try to adjust services and pricing so that they fit the situation, and resist the urge to do what has worked in the past or the same things my competitors are doing.

Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.


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