At first glance, the offer of a discount/flat fee agent sounds great. You are promised that your home will appear on the Multiple Listing Service and repeated on numerous other sites. However, are there things they ignore that costs their clients thousands of dollars?
Below are copies directly from web sites of two agents who do flat fee and discounted services. You need to understand what they are really saying…
***NOTE*** PER NEW OHIO LAW EFFECTIVE OCTOBER 9,2006, OPTION #1 AND #2 PROVIDE THE OPPORTUNITY FOR THE SELLER TO WAIVE THE FOLLOWING SERVICES (OHIO LAW DOES NOT PERMIT THE WAIVER OF REPRESENTATION....ONLY OF SERVICES), WHICH WILL NOT BE PERFORMED BY THE LISTING COMPANY, OR THE BROKER:
1. SEEKING A PURCHASE OFFER AT A PRICE WITH TERMS ACCEPTABLE TO THE SELLER.
2. ACCEPTING DELIVERY OF AND PRESENTING AN PURCHASE CONTRACT TO THE SELLER IN A TIMELY MANNER, EVEN IF THE PROPERTY IS SUBJECT TO A CONTRACT OF SALE, LEASE, OR LETTER OF INTENT
3. ANSWERING THE SELLER'S QUESTIONS AND PROVIDING INFORMATION TO THE CLIENT REGARDING ANY OFFERS OR COUNTEROFFERS.
4. ASSISTING THE SELLER IN DEVELOPING, COMMUNICATING, AND PRESENTING OFFERS OR COUNTEROFFERS.
5. ANSWERING THE SELLER'S QUESTIONS REGARDING THE STEPS THE CLIENT MUST TAKE TO FULFILL THE TERMS OF ANY CONTRACT ( WITHIN THE SCOPE OF KNOWLEDGE REQUIRED FOR REAL ESTATE LIENSURE).
SINCE YOU, THE SELLER, WILL BE TAKING CARE OF ALL OF YOUR CONTRACTS THAT COME IN ON THE HOME YOU'RE SELLING, YOU ARE WAIVING THE FOLLOWING RIGHTS: THE AGENT WILL NOT BE ANSWERING THE SELLER'S QUESTIONS AND PROVIDING INFORMATION TO THE SELLER REGARDING ANY OFFER OR COUNTEROFFER. THE AGENT WILL NOT BE ASSISTING THE SELLER IN DEVELOPING, COMMUNICATING, AND PRESENTING OFFERS OR COUNTEROFFERS. THE AGENT WILL NOT BE ANSWERING THE SELLER QUESTIONS REGARDING THE STEPS THE SELLER MUST TAKE TO FULFILL THE TERMS OF ANY CONTRACT ( WITHIN THE SCOPE OF KNOWLEDGE REQUIRED FOR REAL ESTATE LICENSURE)
Here’s what they are saying:
1) They “will not be seeking a purchase offer at a price and with terms acceptable to the seller.” Isn’t this the primary reason you hire an agent to work for you?
2) “Accepting delivery of and presenting any purchase offer to the seller…” Often instructions are given to the buyer’s agent to present any offers directly to the seller. How can the listing agent even review the offer if they don’t see it?
3) “The agent will not be answering the seller’s questions and proving information to the seller regarding any offers or counteroffers.” Besides marketing and communication with you, negotiating and strategies are what agents are all about. A home seller is left out of the loop on market trends, creative concepts that are helping other home sellers and many details that could otherwise save you lots of money and hassles.
4) “The agent will not be assisting the seller in developing, communicating, and presenting offers or counteroffers.” The home seller is on their own against a biased buyer’s agent and their clients.
5) “The agent will not be answering the seller's questions regarding the steps the seller must take to fulfill the terms of any contract…” With all the details, contacts and follow up required to get a home successfully from an accepted purchase contract to closing is not only time consuming, but with inspections, they can be costly.
What else you should know. Often:
1) You take your own photos, edit them and ship them to the listing company.
2) You often are limited to 1 photo without paying extra fees.
3) You must deal directly with a trained buyer’s agent whose state mandated job is to get the best possible deal for the buyer.
4) You must have the equipment and knowledge on how to scan, copy, edit, print and send documents via email and/or fax. Your agent does not come to you with forms if needed.
5) You must often pay upfront deposits for signs and lock boxes which you must ship back after the listing.
6) There may be extra fees for updating your listing or photos.
7) Often there is a charge for feedback from showings.
8) If you hold your own open house, there is often a fee to advertise it in the Multiple Listing Service.
9) You are left on your own to determine list price. (Some offer a quick search of comparable properties for an additional fee.)
10) You are left on your own to stay up with the competition and homes that are going under contract when yours isn’t.
11) Virtual tours, if offered, come at a high extra charge and you must take the photos, edit, stitch, balance and email them.
12) Unless you pay extra, when dealing with a purchase offer/contract you will not have an agent to:
A) Explain what the purchase offer is really saying.
B) Point out what you are expected to perform in a purchase contract. (This could leave you more vulnerable to law suits and other expenses.)
C) Expose unnecessary expenses the buyer’s agent may be trying to sneak into a purchase contract.
D) Explain what are normal or customary practices and expenses for your area.
E) Help leverage your position in negotiations to get the most money for your home. (This requires up to date knowledge of your immediate market and how buyers are reacting to other homes on the market.)
F) Have a professional trained advocate creatively working for you.
G) Explain what is fluff and what is a legitimate concern in a buyer’s property inspection.
H) Follow through on if the buyer is actually pre-approved or just pre-qualified for a mortgage.
I) Assure all documents are to the right people at the right time to fulfill the demands of the purchase contract.
THE BOTTOM LINE FOR YOU: One of the agents from whose website some of the information above was copied, in 2007 they had a 67.5% failure rate to only a 32.5% sold percentage. That means they only sold 13 homes while failing to sell 27 homes. You would face a 67.5% chance of your home not selling!
(All sources are available upon request.)
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