Q. Tom, I may be selling my home soon; what is the honest truth regarding the effectiveness of my agent ‘holding a Sunday open house from 1-4pm’? I hear conflicting stories regarding whether the activity works to my benefit.
I understand how you feel; there is a great deal of inaccurate information out there in the real estate world. To be forthright, the vast majority of homes would and do sell without ever being held open on Sunday. In fact, by most statistical accounts, less than 5% of all homes sold nationwide sell as a direct result of a weekend open house. If every agent would provide a candid response regarding the effectiveness of open houses as it pertains to sellers, the practice would probably disappear. Case in point: if you asked ten agents how many of their last ten listings sold as a direct result of a buyer walking into an open house (unattached to another agent) and buying it, I doubt it would account for more than one or two sales. So, it begs the question: why are Sunday open houses so prevalent on the weekends? It’s because many agents have over-promised for such a long time on the actual effectiveness of an open house, it has resulted in sellers coming to expect this activity as part of a valid marketing plan. Since agents see this “face-to-face time” with potential buyers and neighbors as an opportunity for future sales, the practice continues every weekend in most communities. The policy I advocate: tell sellers the truth and allow them to make the choice.
Q. What’s going on with real estate commissions in today’s market? Are they going up or down?
Let me first affirm that real estate commissions are negotiable by law – a statement printed on every front page of every California Association of Realtors residential listing agreement. And keep in mind that when a seller agrees to an overall fee with his or her listing agent, the fee for the buyer’s agent (sometimes called the selling agent) is also set at the same time. Now to your question… commissions eroded a fair amount back in the heyday of real estate when it seemed like every other person you knew had a real estate license and competition for business was feverish. In today’s market, depending on the business model of the real estate firm you choose to deal with, the total commission usually ranges from about 4% to 6% of the purchase price. Once again, it can be whatever percentage you choose to negotiate but my experience is that you get what you pay for. A professional Realtor’s experience, knowledge & skill can provide a tangible return on the seller’s (and buyer’s) investment in the way of improved pricing, better terms, lower stress, less risk and fewer problems before, during and after the sale.
Q. A couple months ago you addressed the pros & cons of “staging” a home prior to coming to market. I just recently heard of “virtual staging.” What is it?
Virtual staging is a controversial concept whereby the pictures used in the marketing of the home are ‘digitally’ altered to show the home as it could be instead of how it actually is. Imagine a family room in a home with hardwood flooring, beautiful windows and custom lighting, none of which are there in real life! Realtor trade associations are now working out the necessary disclosure requirements of virtual staging so that properties are fairly represented by agents and sellers to the consumer. After all, no buyer likes to be surprised or be subjected to reading the ‘fine print’ of potentially misleading electronic marketing. This is an evolving issue with more to come later.
