The idea that listing agents “market” your home in the age of internet search is a MYTH. Yup…We said it.
With the advent of the internet, and in particular real estate search engines, most listing agents no longer actively market their listings. The National Association of Realtors (“NAR”) data shows that 98% of consumers in the market to purchase a home begin their search online. The Internet receives about 100 million real estate search impressions per month. And of those, approximately 75 million go to the three dominant real estate search portals: Zillow, Trulia, and Realtor.com.
The irrefutable truth is that listing agents simply upload your home onto the local Multiple Listing Service (MLS). Within 24-48 hours of hitting the MLS, every listing gets syndicated to over 60 different real estate search portals with software such as ListHub. Interested buyers enter search information like price, zip code, square footage, and number of bedrooms and bathrooms. If your listing fits within a buyer’s search criteria, it will be discovered. Of course if you’ve ever looked to buy or sell a home, odds are you already know this.
Because there is little else to differentiate their services, some agents will assert that Internet search is only one small part of their marketing efforts. They’ll cite Open Houses and Direct Mail Campaigns as “aggressive” marketing efforts. But the honest agents won’t overplay the role of these tactics. Again, according to NAR data, only 2% of homes are sold from Open Houses. So why do agents really like to do them? Open Houses are a great way to secure qualified buyer leads. Ever wonder why you are required to sign-in with email and contact info when you attend an Open House?
Here are some hard facts and numbers for the Philadelphia market.
- It takes a listing agent about 30 minutes to tour a seller’s home to give a sales consultation.
- It takes the agent’s admin about 15 minutes to prepare a Comparative Market Analysis (CMA).
- It takes an agent’s admin about 15 minutes to upload your listing data onto the local MLS.
- It costs a listing agent about $100 for 25-50 HD photos of your home.
- It costs an additional $125 for a hand-walked virtual tour of your home – the majority of agents won’t go for this expenditure.
- It costs about $60 to have a sign hung (and removed) on your house.
- It costs about $10 to install a lockbox at your front door.
So most listing agents invest roughly 30 minutes of their time and 30 minutes of their admin’s time in acquiring your business: 1 hour. And in hard costs, the investment is roughly $495 in preparing your home for the market. If you’re paying the standard 3% listing agent commission for the sale of your $500,000 home, that’s a $15,000 commission. Plus, most big brokers charge a $499+ administration fee at closing just for the heck of it. Sound like a fair value exchange?
To add insult to injury, it is gospel in the real estate industry that listings are fundamental to driving buyer leads. Brokerages must get listings to survive. The accepted rate-of-return in the industry holds that for each listing an agent acquires, he or she will generate at least one closed buyer. In fact, Gary Keller, the Founder and CEO of Keller Williams Realty and author of “Millionaire Real Estate Agent” (aka. in industry terms, this is the “Agent’s Bible”) puts that rate-of-return much higher at 1-3. That’s right, Keller claims that each properly marketed listing should generate at least 3 buyer closings. Hard to argue with the founder of the fastest growing real estate brokerage brand in the nation. Makes you wonder, though, perhaps listing agents should pay sellers for their listing if its generating so much additional business.
This is why Houwzer lists homes without charging a listing agent commission.
We provide a more cost effective solution for both home sellers and buyers. After all, the buyer is ultimately paying both the listing and buyer agent commissions. Part of our mission to democratize real estate is by creating a more equitable value exchange between sellers, buyers, AND agents so it’s a win-win-win for all. It’s time to find a better way home.