Why agents sell better than online tools
The real estate industry is going increasingly digital. When it comes to selling property, auto-mated online tools promise huge savings on agency commission. In most cases, however, hid-den costs emerge sooner or later or properties end up not being sold at the best possible price. It is therefore worth looking very closely at what real estate agents are offering and the arguments they are putting forward.
New, digital real estate agencies are springing up online every day. Their innovative business model is based on the promise of low-cost property sales thanks to modern technology. These companies position themselves as the polar opposite to “traditional” real estate agents, offering digitised part-services throughout the sales process, allegedly at rock-bottom prices.
But be warned: it’s worth taking a closer look. It is not uncommon for hidden costs to be lurking be-neath the surface of these “bargain deals”. In any case, it is essential to request a detailed breakdown of the services to be provided and compare it with other offers. This check will show that all providers offer a similar procedural concept and the digital tools used are usually exactly the same as those that traditional real estate agents work with. So it is definitely not the “innovative tools” that account for the difference in price. The offers are cheaper because they skimp on the scope of services.
Insurance companies and banks are also increasingly offering real estate brokerage services, their aim being to generate new income streams for their eroding regular business. A side effect of this expansion of services is that they also need to drum up orders in their core business. The sales staff are under tremendous pressure to achieve success. However, better results can be gained with a spe-cialist independent partner who can focus purely on customers’ interests and is not obliged to deliver “cross-selling deals”. Specialist, independent agents who run their own businesses are also motivated in a way that employees with a secure basic income are not.
Digital tools lack customer focus
Every property is unique – as are the people selling them, who have their own personal needs and emotions. Digital forms are no substitute for a non-binding initial consultation with an agent armed with local knowledge. At face-to-face meetings like these, you soon realise that a professional real estate agent understands your wishes and requirements and knows what potential your property can offer. Now of all times, when spatial planning is heavily influenced by this kind of dynamic, estimating potential is crucial to valuing a real estate property. A professional real estate agent will take into ac-count the unique qualities of the property on offer and come up with a tailored marketing strategy. This focus on people and property is a strength that we cannot expect any digital tool to match.
Furthermore, simply advertising on as many online portals as possible is nowhere near enough to guarantee a sale. Getting the presentation just right is equally important, as is speeding up the sales process. Many real estate sales end up being dragged out unnecessarily because not enough atten-tion is paid to the potential buyers. Offering comprehensive, tailored advice to buyers is a character-istic feature of professional property marketing.
What to remember when concluding a brokerage contract with an agent
At the end of the non-binding initial consultation, customers receive a marketing offer from their real estate agent. This regulates certain key aspects required for selling the property. For instance, it sets out an intended time frame for completing the sale. The length of time for which a property is put up for sale is linked directly to the chosen marketing strategy and the sales price the customer is after.
It is essential to cast a critical eye over the asking price being offered for a property. If the asking price is set too high, it often needs to be adjusted to below the actual market value later on in the marketing process to ensure that the property can still be sold successfully. You can tell if a real es-tate agent is genuinely qualified based on their experience as demonstrated by local and verifiable references from successful sales. You can assess their negotiating skills when you are concluding the brokerage contract with them. If the agent caves in too quickly when negotiating the price, or fails to put forward convincing arguments, this is hardly likely to change when it comes to actually selling the property.
Some real estate agents promise that the fees will be paid by the buyer – a practice that goes com-pletely against the “principal pays” principle. It is not acceptable for customers to gain benefits from their property being marketed and for the buyers to be expected to pay for this, as this could give rise to conflicts of interest and give the real estate agent the wrong incentives for getting the deal done. There are also tax considerations that do not support offers of this kind.
Fixed fee or performance fee?
In the case of most fixed fee service providers, it is the seller who bears the marketing risk; any costs incurred, including agents’ fees, must be paid even if the property is not sold.
Agents with performance fees are only remunerated once the real estate transaction has been com-pleted, at which point they receive a percentage of the selling price in return for their services. An agent with a performance fee in the 3% to 5% range assumes the marketing risk and will do every-thing in their power to sell the property at the best possible price within the agreed marketing time frame.
Value and price are not the same thing
There are various ways to determine the selling price you should be aiming for. All calculations are based on a comprehensive market analysis, which must be an integral part of the sales process. The established market value of your property will not necessarily match up with its market price. A prop-erty for sale needs to attract sufficient interest to achieve the best possible market price outcome. The market price is therefore at the point where demand and supply meet. For over a year now, RE/MAX, for example, has been using a special tool to work out the best possible market price. This tool shows how the price is calculated in a transparent way for everyone involved, and it enables RE/MAX to determine the actual market price of any given property. The best possible selling price is therefore achieved for the seller and the buyer ends up paying a fair price for the property. RE/MAX's procedure is the only one of its kind in the industry and is set to revolutionise the way real estate is marketed over the coming years – as proven by experiences in other countries where RE/MAX has been using this approach for a significant time already.
A relaxed property-selling process
An experienced real estate agent will shoulder as much of the customer’s burden as possible, so they don’t have to deal with viewings or negotiations with prospective buyers. “Traditional” real estate agents like those at RE/MAX are also on hand to help their customers further even after the transac-tion has been completed. It is therefore worth examining offers closely and comparing them with your personal requirements. RE/MAX real estate agents and other “traditional” agents use technology to achieve better results for their customers, offer comprehensive services and offer their customers maximum support.