In the world of Real Estate, there are landmines you need to be aware of just like any other industry. Today I am going to touch on some of the dirty little secrets that still exist in today’s Real Estate market that you should be aware of (at least here in Denver). Hopefully, this advice is useful in helping you find your next Real Estate Agent in Denver or any other market you may be looking to sell your home in. The first dirty little secret we will start with is one we find more annoying than anything and that’s hidden “Admin Fees” agents sneak in at closing.
The Hidden Admin Fee:
The hidden admin fee is a fee that we have seen in a fair amount of transactions we have done. It is so common that when we switched title companies this year, the first question they asked us was do you want to add any fees to your transaction? These fees can range anywhere from $50 to upwards of a few hundred dollars. This is money that is basically taken from the proceeds of your home and placed right into the agents pocket. It is usually called an admin fee that is justified by the agent to pay a “transaction coordinator” or an “administrative assistant”. The average home in the Denver market is close to 400K which means the average commission is well over $11,000!! We personally find it very distasteful agents tack on this fee in ADDITION to taking over $11,000 from the proceeds of your home.
The Big Promise to Get You to Sign:
One of the tactics we have seen in the Denver market which is seemingly becoming more popular, is agents over promising higher sale prices and faster sale times. The eagerness to get you to sign an Exclusive Right to Sell is absolutely warranted in this antiquated industry because once you sign, you can no longer sell your house with another agent regardless of how good or bad the agent is. To some agents, they are willing to go to great lengths to tell you the things you want to hear in order to get you to sign a contract with them. We have seen the scenario play out many times. A client decides to sign up with an agent that said he or she could get 30K more for their home. Three weeks later the home price has dropped, the home has not sold, and even worse, the client could have potentially lost their best offer due to the fact the home was so overpriced. Remember, data doesn’t lie, don’t fall for anecdotal sales tricks, and all agents draw buyers from basically the same pool. No one can get you more or less for a home unless they are buying it themselves. The Real Estate market like any other market will yield you what your home is worth. You can read more about this tactic and how to avoid in our post “Don’t Fall for the Over Pricing Trick“.
Marketing is a Scam:
Okay so scam is a little harsh but in this section we will walk you through the truth and fluff about what is out there and how you can better understand Real Estate Marketing. According to a 2015 National Association of Realtor’s study, all home searches regardless of age, start online. Not with a yard sign, grocery store magazine, beautiful flyer, etc. You basically get the picture. The truth is, almost all Real Estate transactions stem from a little place called the MLS (Multiple Listing Service) and it’s syndication through it’s API. Almost every agent knows this which is why EVERY agent uses this. Agents will do things to make their services and fees seem just but they really have no effect on the actual sale of your home. A great example of this is hosting an open house. Realtor.com has a great article about this called The Dirty Little Secret of Open Houses which explains what most agents already know. Open houses are great for agents to recruit more business but have little to no effect on the sale of your home. There are some exceptions to specialty agents that we have found. In areas like Aspen or Vail where homes can get into the multi million dollar range, good agents tied into certain communities can bring you buyers you may normally not be able to find with a traditional agent. In these cases, it may be worth finding an agent that specializes in these types of deals. For everything else, remember that we are all drawing buyers from the same pool. Differences to look for are strong strategies like amazing photos, coming soon tactics, proper pricing etc. from your agent. Don’t fall for the “I have a huge list of buyers” or “I can get more for your home”. Look for substance and approach to how they are going to bring your home to market.