“Buyers just want price,” says Mike Morgan, a Stuart, Florida-based lawyer, real-estate broker and consultant who researches property markets for hedge funds and financial institutions. “Buyers have become educated and they can easily cut through the fluffy incentives.”
“On one $429,000 home a client wanted me to sell, the seller wanted to give the broker a $30,000 bonus on top of the commission. I told him it wouldn’t help. I told him to just drop the price.”
Then there was this advice about marketing strategy:
Morgan suggests you sell exclusively through Internet-based property sites and local Multiple Listing Services. He has found that newspaper ads, signs and open houses don’t work as well as the Internet.
“If you don’t get any calls on your listing price after a week, drop your price $10,000 or about 2 percent of your original asking price,” Morgan says.
“The market will tell you what the price of your home is. You better be priced 10 percent under your competition — and then be prepared to think about accepting offers under that.”
This isn’t news, or at least it shouldn’t be. It is an inconvenient truth many agents won’t speak. In the spirit of the upcoming election season, I have this message for sellers and agents: “It’s the price, stupid.”
Old marketing methods no longer work, if print advertising worked, thousands of Boston condos would be advertised in the local paper. But instead of being flush with real estate advertising dollars, newspapers are cutting back or shutting down because ad revenue has moved online. Incentives and bonuses to agents don’t work as well in the Boston condo today like they did in the 90s.
The reason – the Internet.
Once the real estate industry woke up and realized that the Internet was winning the war for the eyeballs of consumers, and yes, prospective Boston Beacon Hill condo buyers, they allowed listings to be shared online. Buyers are often now the first to identify the Beacon Hill condos they want to see, taking agents out of the role of gatekeeper of MLS information. The listing information made available online does not include the commission amount and any bonuses offered to the buyer’s agents, so these agent incentives rarely play a role in selling a property.
Offer any bonus to the buyer in the form of closing costs or an interest rate buy down and you will get the attention of those who matter – the buyer and the agent who has their buyer’s best interests at heart (that concept is called fiduciary, and it’s actually the law). If you really want to leverage a monetary incentive and trump the neighboring competition, offer to lower your asking price on the property. It will save the buyer more money every month.
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