Posted by Leanne Finlay at 2/15/08 8:44 p.m.

Joy, you are very correct. Some sellers do great with no 'advisor', but most do not. And, it's more difficult than many can imagine when we are trying to work with a seller who has no advisor.

Posted by Kary L. Krismer at 2/15/08 9:15 p.m.

I could see where sellers using limited service would be hypersensitive about price, to the extent of being unrealistic.

As to the untimeliness of responses, I don't see that as a big deal at all. Unless you're going to accept the offer/counter in full, being timely really isn't an issue. There can be strategical reasons to not be timely.

Posted by Debra Sinick at 2/15/08 10:50 p.m.

Joy,

You are right. It can be very difficult. There are some people who do well with limited service, there are some that do not. Buyers and sellers do have a right to choose how they want to handle a real estate transaction.

Your post, though, points out some of the issues that many people are not even aware of when they make the decision to choose a broker. It truly is difficult for people to imagine all the different scenarios that can and do come up in a real estate transaction. Some transactions go very well and, in fact, are just a breeze. Others require a more in-depth knowledge of contracts and negotiation, which most home owners do not possess.

Kary, I disagree with you regarding timely responses. If someone does not respond in a timely fashion, the other party can get discouraged, angry, and walk away. You are correct, if a party is countering an offer, it may not matter. But too often it does matter. Emotions run high on the part of both parties during contract negotiations and one party could walk.

I just sold a listing in which the buyer missed the date to respond to the seller's counter offer. By the time they agreed to the counter, another buyer came along who was offering significantly more than the seller would have accepted in the first counter. You snooze, you lose.

Posted by Kary L. Krismer at 2/16/08 8:03 a.m.

Debra wrote: "Kary, I disagree with you regarding timely responses. If someone does not respond in a timely fashion, the other party can get discouraged, angry, and walk away. You are correct, if a party is countering an offer, it may not matter. But too often it does matter. Emotions run high on the part of both parties during contract negotiations and one party could walk."

Yes, that's the risk you face, and from the seller's side that might not be a good risk, unless the buyer made a low ball offer. In fact, the low ball offer is about the only situation I can see where a seller might want to do that. From the buyer's side there are more situations where you might want to do that. But there are also times you wouldn't (e.g. the perfect house in a hot market).

But that's the very point of not being timely. To have the other side have an emotional reaction. Besides anger it can be disappointment, and when the other side realizes that it can work to your advantage.

I was just pointing out that there can be strategical reasons for not being timely.

Posted by laxtosnoco at 2/16/08 8:37 a.m.

From your example it seemed like the problems with the first property had little to do with limited service vs. full service. From my reading the top 3 problems were:

1. Seller's unrealistic pricing expectations
2. Seller's misconception of property condition
3. Unresponsive seller who was apparently not it any hurry to sell

I see all 3 of these as many new properties pop on the MLS: 25% overpriced vs. recent comps, horrible photos, clear condition problems with no reference in the listing, etc. Since most of the listings are from full service agents, I don't think the broker model has much to do with it.

BTW, how about naming the limited service firm you're talking about? Also, care to provide the MLS# for the property that didn't sell?

Posted by Kary L. Krismer at 2/16/08 9:01 a.m.

Lax, I agree. And that can happen with any brokerage if the agent isn't tough enough on the seller (something I've been guilty of myself from time to time).

This is sort of picking up a theme from a thread at Rain City, but the best client is one that has no unreasonable expectation of price, and which spends months getting the property ready for sale (assuming it needs months). If you have a client with unreasonable expectations that doesn't want to do anything, you'll have headaches.

BTW, don't expect an answer to the firm and MLS number questions. Over in the other thread on Not Business as Usual when I mentioned an agent who had done something bad I limited the firm she was with to one of three, just to show she was with a big firm.

Posted by Leanne Finlay at 2/16/08 9:36 a.m.

Hi Kary, thanks for telling us how to negotiate when you're the listing agent & we have a buyer, or when we have the seller and you've got the offer :-)!!

Lax, those 3 items are real problems when a property isn't selling. In my experience most sellers with limited service companies don't have a clue that their price/condition is wrong, and what appears to be a lack of motivation is often a misperception of what reality is. Some sellers who haven't sold since the 1980's still think it is normal for a house to take 120+ days to sell. That certainly may be a "normal" for this coming year, but hasn't been a "normal" for the last ten years at least ...

And, of course, that brings up the point that there area a lot of agents out there who haven't ever had a listing that was well priced take more than a few days or a month to sell :-)!

Posted by Kary L. Krismer at 2/16/08 9:42 a.m.

Leanne, I think it's more being aware that's how some people do it. I've seen it mentioned in classes, so it's hardly a secret. Knowing it is a possible strategy being used against you is a way to calm your client if the strategy is used against you.

Posted by Joy Canova at 2/16/08 10:15 a.m.

I agree that timing reponses may be a strategy, albeit a risky one if you've been on the market a long time without any bites. In this case, however, it was symptomatic of a fearful decision-maker who was going it alone.

Upon my inquiries, the listing agent told us we would have a repsonse by a certain time, only to have that time pass without word. The LA said he was waiting for a response himself.

Here's another little tidbit of information: I interacted with the seller on numerous occassions, as he was present during all visits, with the exception of the inspection (at my most adamant insistence). I was aware, first hand, of his naiveté about the market and process of selling.

The seller was very chatty about his goals and objectives in selling. Knowing that, I feel my buyer's offer was a gift, but he could not see it.

Nevertheless, there may be a better deal for him out there -- someone who has extra time and money to correct all the substandard improvements of which he was so proud. He was a nice man, if misguided seller; I wish him well.

Posted by Kary L. Krismer at 2/17/08 8:33 a.m.

BTW, I tend to take the position that sellers should have these limited service options. I also think more people think that they are appropriate for them than what is the case (they overestimate their own abilities because they don't know what they don't know), but that's another issue.

But the big problem I have with a lot of these services is they don't seem to offer keyboxes. Now I haven't checked this out directly--it's what I've been told by people using these services. But it seems like it would be a good service for these companies to offer, and IMHO, every listing should have a keybox for security reasons (in fact that was one of my first pieces here):

blog.seattlepi.nwsource.com/realestate/a
rchives/122112.asp

Does anyone know what companies do offer them?

Posted by Leanne Finlay at 2/17/08 9:42 a.m.

Kary, it was a joke!! You said using emotional strategy was good for many reasons (and it is), so I was teasing you with 'that's how we'll deal with you' :-)!

Posted by Leanne Finlay at 2/17/08 9:55 a.m.

NWMLS rule # 50k says that all listings must have a keybox unless seller has a written request not to allow one. I haven't run into too many times where there is no keybox, but lots of times where there is a keybox, with a 'by appointment only', which unless the seller really has a strong reason why, also can be a poor strategy. And, if there is no keybox, there needs to be someone who will call the agents who want to show fairly immediately to set up a showing time -- or the moment can be gone.

Sellers really need to understand that a lot of buyers may not give them a second chance if they cannot get inside with their agent (during normal daylight hours, seven days a week).

Posted by Kary L. Krismer at 2/17/08 11:57 a.m.

Leanne, I agree about the need for one, and hadn't thought about the rule. Does the limited service rule exclude that, or maybe they require them to sign a written request to not have one (probably hidden in boilerplate somewhere).

I just know of two limited service listings where I talked to the owner and they didn't have one. One said they could rent one for a higher amount, and said they would, but they didn't for some reason. I didn't carry it any further.

Posted by Dugald Allen at 2/17/08 2:13 p.m.

Some thoughts...

...on limited service listings. I think we need to distinguish between the $x00 companies and those offering "full service at a discount."

I have found the fixed-fee brokers to be very knowledgeable and professional - they are all entrepreneurial business people. For the most part, they distinguish this business (it often is just a segment of their business) by offering very little at a very small price - much like Home Depot's DIY model.

What I am noticing is that it's these give-it-all-for-less companies (full service at a discount) are the ones who don't "get" that service is not a commodity and the service suffers accordingly. Although I will say that I recently completed a transaction from the buyer's side with a "full service" listing agent and it was absolutely awful.

One (very good) agent recently left my office to start one - I'll be interested to see where it goes.

...on lock boxes. I believe that most prix-fixe advertising-only companies offer them for an additional fee ($95 + shipping at two I just checked for example.) On the one that I am more familiar with, you do have to check the box on the application noting that you do not want one.

...on sellers who gravitate to these services. laxtosnoco has three good reasons (although all three imply the seller is uneducated or wrong) but there are another two groups that immediately come to mind: investors (theoretically maximizing equity) and those who can't afford the full service model (no equity). I came across one of the latter this week - not a good story.

Posted by Mack McCoy at 2/18/08 6:56 a.m.

If you give enough people an option, someone will choose the wrong one.

I don't know what the optimal number of options is, but zero isn't it, and neither is a number approaching infinity.

Limited Service, is, by definition, Limited. That means, the Seller gets to do the rest of what needs to get done. It's not as easy as it looks, especially if you've never done it before.

There are general characteristics of do-it-yourselfers, and competence doesn't fly out at me the way other characteristics do, such as: an under-estimation of the scope of the project, an over-estimation of one's ability to complete the project, and an over-estimation of what the completed results will be.

Generally, the do-it-yourselfer has insufficient experience (What's to know, anyway?), and as a result, is hiring the least competent person he knows (himself) to do the work of a professional.

For truly minor matters, it doesn't matter at all. And experience can be a great teacher, and there are some people who have learned enough to do a good job; however, I've found that most of those people have moved on to bigger and better things and can't afford not to hire professionals, so as to not take time away from more profitable and rewarding activities such as their careers.

I've said it before: life is short, if you want to play real estate salesperson with your own home, have at it. If you want to "partner" with a limited service company, party down.

To close a sale, a seller needs to: attract a ready, willing, and able buyer; you have to be able to get them into a contract; and you have to be able to keep them there.

Like other posters here, I agree that you can have a devil of a time putting a contract together with a Seller posing as an agent, with their Limited Service broker sitting on the sidelines waiting for the completed P&SA to come through the fax machine.

Agents shouldn't get in the way of people trying to come together on a transaction, but neither should the principals to the transaction, which sellers - often inadvertently - can do when left to their own devices.

Posted by Leanne Finlay at 2/18/08 8:27 a.m.

Another point that hasn't been brought up yet, is that it is our duty to our buyer clients to get them the best price and terms on a transaction that we can. I have found that the limited service company sellers either are too far above market price to be able/ready to negotiate, or are too ready to blurt out their need to sell, by telling us far too much information than they should. It certainly is nice to know directly from a seller that they've bought another house and if they can't close by 3 weeks from now that they'll lose that other house, but it most certainly doesn't get me to tell my buyer client 'let's offer full price for that nice couple' ...

Posted by Mack McCoy at 2/19/08 2:45 a.m.

There's nothing wrong with naïveté, but I do think that it is naive to believe that branding is of little importance.

Very few of us Believe that generic products and services are as good as branded ones, and most of us believe that generics are inferior and as thus, should be discounted price-wise. In the case of pharmaceuticals, for example, we had to learn that generics were, in fact, equivalents, and that paying for the Brand was usually a waste of money.

Nobody will even listen to your story when you tell them that the homebrew computer your nephew built for you died on delivery, it's a story when your Dell or Mac dies and you don't get treated well by their customer service departments - because Brands are expected to provide higher quality and service than generics.

This ties in to Chuck's post, because it is, at the heart of the matter, why so few productive agents and teams want their own brokerage. We want to build a name and brand for ourselves, but we recognize the value in being affiliated with an even more recognizable and respected name. Mack's Flats & Shacks doesn't really carry the same cachet as Mack McCoy with Lake & Company Real Estate.

Although, I do like the rhythm ...

Posted by Kary L. Krismer at 2/19/08 8:24 a.m.

Mack, the problem is that branding with agents doesn't give you the uniformity that you get with say branding of a food product. When you buy Kellogg's Corn Flakes, 99.999999% of the time you know what you're getting. When you get an agent from any agency, you don't know what you're getting if all you know is the name of the agency. You need to know more.

If anything, perhaps it's more like buying a car. If you buy a Toyota, chances are it will be reliable. If you buy a Mercedes, chances are you'll get to know the names of several people at the dealer's service department by name. But chances don't mean a thing when you're only having one transaction. Back in my younger days I bought a Fiat X-1/9 because I enjoyed working on cars and my Honda wasn't allowing me to do that. Turned out the Fiat was not your typical Fiat--it was reliable!

The point is you could go to an agency where 80% of the agents are good, and get a bad one. Or you could go to an agency where 80% of them are bad and get a good one.

I'm perhaps a bit more sensitive on this due to my prior profession. As an attorney you deal with other attorneys more regularly and more intensely than what we do as real estate agents. As I've mentioned before, there are a number of attorneys with large well-known firms that are not very good (to be polite), and a lot of attorneys in very small firms who are great attorneys.

Posted by Joy Canova at 2/19/08 8:41 a.m.

Dugald's point is important. There is limited service and there is limited service.

I prefer those who are up front about it and apply Rule 4 exceptions -- agents know to work with the seller on negotiations.

However, some (I have to qualify this) flat or reduced fee brokerages who are playing the profit-in-volume game are not so obvious. Buyer's agents are obligated to work with a listing agent who may not be a good advisor to the seller.

Most agents, I am sure, are not intimidated any of these situations, but it may influence the process and we would do well to spot the signs. That way the buyers know they may be in for a little ride.

Which brings me to the intent of my post. I do not like to paint with a broad brush for any particular business model. Nevertheless, we help our clients by understanding the various kinds of situations in which neogtiations can take. Knowledge is power, but it also provides some element of normalcy to an otherwise tense situation.

Posted by Mack McCoy at 2/19/08 10:04 a.m.

- Mack, the problem is that branding

Kary, I'm not arguing that consumers shouldn't look past the brand. I do mean to say that they often don't, and that they - we - often impart an expectation of quality upon brands that may or may not be deserved.

Posted by buddhabrad at 2/21/08 3:43 p.m.

Apparently they are having so much 'fun' in this market, no one has any fresh ideas?

Posted by Mack McCoy at 2/22/08 12:33 a.m.

Necessity is the mother of invention. What's necessary, again? What's the problem, again?