Written by Jennie Norris, ASPM, IAHSP – Owner, Sensational Home Staging
As the Market Gets Hotter Does this Mean Realtors Should Earn Less? The public has a general perception that Realtors don’t work very hard for their money. Right or wrong it is just a fact. They believe that all Realtors do is stick a sign in a yard, the house sells, and the Realtor gets paid a lot of money. Of course those that work IN real estate as an agent or an affiliate know this is a fallacy, but getting sellers to understand the VALUE of working with a quality, full-service Realtor can be tough – especially as the market continues to heat up and get stronger nationwide.
When times were tough and it was hard to sell a house because of the economic conditions, sellers were more apt to realize that selling their home would take work and effort. They were more willing to pay a qualified Realtor to help them get the results they wanted.
When a market heats up and turns into a “seller’s market” like we experienced at the start of 2013, the belief is that Sellers don’t need to do much to sell their house. Why should they pay a Realtor full commission to do something that is going to happen anyway? Not only that, but when an industry is seen as lucrative and “easy” more people jump into it creating more competition for business. Real estate licenses are being issued at record rates nationwide as a result of the up-turn in the real estate market.
In a seller’s market, the For Sale By Owner (FSBO) market also increases because the belief is that it is not hard to sell a house when demand is high and inventory is low. Again, those that work IN the industry know the value of working with a Realtor who has knowledge, resources and credibility.
It is the misconception where the seller wants the most for the sale of their house but does not necessarily want to pay to ensure that happens. In real estate the old adage, “You get what you pay for,” is very true when it comes to selecting someone to help you sell your house however not all sellers seem to understand this.
Realtors that want to keep their value and income strong need to figure out other ways they bring value to the sale to get listings over their competition. Staging is one of the best ways to do that. Statistically a Staged house sells faster and/or at a better price than the un-staged competition. This happens whether the market is hot or slow, whether a seller’s market or buyer’s market. Statistics that have been gathered for years prove this is true. This means that even in a hot market, a Staged house will sell for MORE than the un-staged competition – and this is money in the seller’s pocket that they would not otherwise have.
It is all about the Staged List Price versus the List Price and the difference between the two categories could be $5,000 to $100,000 depending on your market and type of house. When a seller realizes that you bring a tool to the table that can help them net MORE from the sale of their house, they want that. A seller does not sell to get “some” of the money out of their house – they want ALL the money possible.
Realtors – instead of thinking you have to discount your commission fees in order to get listings, think about the resources you have that bring increased VALUE to the sale process. When you bring in your team member – your Stager – to work with the Seller, you are adding value to the process. When the house is Staged professionally, the house looks better than the competition or competes equally with the competition and this benefits the seller. Statistically Staged houses help a seller keep or make 5-20% more on the sale of their house. When the seller is asking you, the Realtor, to reduce your commission by 0.5% -1.5% to “earn their business” you can share that you don’t do that because you have a tool at your disposal that will help them keep or make MORE than they are asking you to discount.
When Realtors discount commissions they must work that much harder to get more listings to keep their income where it needs to be. This means their time and attention per seller is reduced as they scramble to get more listings. Rather than be that discount agent, be the agent that brings value, time and attention to the seller. Incorporate Staging as a key listing tool – and even be willing to PAY for the consultation for your seller as a benefit of listing with you. Around the country that ranges from $100-$500 for an average size house depending on where you live. It’s an investment that will not only help you get the listing over your competition, but also helps you keep your commission strong.
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