WHY BROKERS DO IT?

Yeah, well, brokers also sometimes leave money on the table, too. It isn't an exact science.

Posted by: guest at March 20, 2008 4:35 PM

FSBO also limits your buying pool which, in turn, brings down the price. I've take a pass at some FSBO open houses that don't allow brokers because I like my buyers broker and want to work with her through the process. (Note, I'd go to see an amazing FSBO apartment-- broker by damned-- but on those boderline places, I'm less likely to go.)

Posted by: guest at March 20, 2008 4:36 PM

4:36 - you make no sense. Borderline places you should avoid, whether FSBO or sold by broker. But why you'd pay more to pay your broker rather than buy a FSBO that is lower priced becase there is no broker is beyond me. Oh, I get it, this is a broker post.

Posted by: guest at March 20, 2008 4:52 PM

"can anyone tell me why brokers will price something so out of price range of every freagin' comp in the area and GET THE ASK PRICE?"

this question surely can't be serious, can it?

Posted by: guest at March 20, 2008 5:07 PM

I think the is a bogus post designed to make people believe brokers can get a higher price.

Posted by: guest at March 20, 2008 6:59 PM

or from someone who is frustrated because they are trying to sell their place and can't move it but they see other properties moving by those who use a broker. it can be a frustrating task. I think big name brokers carry a atrong marketing tool (their name!) while many folks are uncomfortable negotiating directly w/ the seller.

Posted by: guest at March 20, 2008 8:01 PM

I find it strange that everyone on this blog thinks that the broker sets the price. Every time that I have sold property I have told the broker the price that I wanted it to be listed at. Some times the property sells at below the listing and sometimes there is a bidding war. Leave the brokers alone.

Posted by: guest at March 20, 2008 8:17 PM

because brokers know more about real estate than idiot owners?

Posted by: guest at March 20, 2008 9:44 PM

oh please, I had to (continually) convince my big name broker to list my place at the price suggested by said broker originally - after she found out another apartment in my building was on the market for a bit less. My place had a different room flow and more bedrooms - which matters, despite sq. feet being the same. I insisted we keep the slightly higher price, and got a full price offer 1st day on the market. In hindsight, we should have set price even higher. I suffered from the same thing many people do who get sticker shock when we see prices rising quickly - we think the brokers are all putting prices too high. In reality (as has been pointed out by others in posts here) when it comed to apartments, brokers sometimes underprice. Live and learn...

Posted by: guest at March 21, 2008 12:09 AM

"I think the is a bogus post designed to make people believe brokers can get a higher price."

I completely agree. That was my first thought too in reading the OP's post. Phony. And obviously it's from a Corcoran broker due to the specific plug for Corcoran.

Wow, now I'm even more impressed with Corcoran.

Hardly.

Posted by: guest at March 21, 2008 2:05 AM

"because brokers know more about real estate than idiot owners?"

Are you kidding me? Lots of brokers have little experience. One can hire a broker with a lot of experience, they're out there, but please, we went to so many open houses and encountered many idiotic brokers with no sales skills, just tacky pushy personalities, who didn't even have accurate info about the schools or the neighborhood sometimes. As for the listings you get with brokers, most don't even spring for professional photography and many don't provide floorplans.

Brokers need to be very smart and informed and provide a lot of services or they won't be perceived as being needed anymore.

Posted by: guest at March 21, 2008 2:15 AM

We did a FSBO and were very successful (moreso than a broker also selling a place in our building). Of course, it may have helped that the broker also put a listing up, but their place sat for months before we put up our place. We had a much better response and great offers. Good pictures, good description, and just posting on the Times and Craigslist is all we did. I'm sure every case is different, but we had a great FSBO.

Posted by: guest at March 21, 2008 10:40 AM

I know someone who had the same experience as 10:40.

The overpricing by brokers especially Corcoran has caused a backlash they may not have anticipated. It is making buyers specifically seek out FSBO properties. They believe they can get a better deal that way. And of course they can. If a seller isn't paying commission they can more easily price the property a little lower and still make more money than if they used a broker and paid the broker that 6%.

Posted by: guest at March 21, 2008 12:03 PM

It all depends on what you feel comfortable with. FSBO can certainly work for a lot of people and is a good way to go if you have the time, skill and inclination to sell your own property.
If you decide to use a broker, try to remember that a good one should be working for you--not just for themselves (although they of course have their own interests in mind as well). If it seems like you are constantly arguing with them about pricing or anything else then find yourself a new broker! A lot of people in RE are unprofessional, greedy, unscrupulous and just plain unintelligent, but there are also plenty of skilled professionals who will be more than happy to work with you to sell your property for the best price you can get. It's important to choose a broker who you feel comfortable with, maybe someone who has been recommended to you by a trusted friend or neighbor rather than just picking whatever broker has name recognition or a big brokerage like Corcoran behind them. It's no wonder so many people hate RE brokers when they don't really take enough care in hiring a broker to begin with.

Posted by: guest at March 21, 2008 12:34 PM

Yeah, well, like in hiring other types of "professionals," it is sometimes hard to find anyone who will recommend the person they've used. And as to finding a new broker, have you forgotten that you sign a contract to sell with them?

And, everybody in this process (broker, attorney, inspector, mortgage broker, etc.) is always working for their own interests primarily - that's just a fact of life.

Posted by: guest at March 21, 2008 2:28 PM

Just follow the ABC's of real estate: Anyone But Corcoran!!!!

Posted by: guest at March 21, 2008 2:30 PM

Brokers aren't any more successful than FSBOs... and they don't know more than you or me (or anyone with access to Zillow and Property Shark).

We have sold two places in Brooklyn - one through a broker, one FSBO.

Frankly, our FSBO was more successful and pleasurable than our broker experience -- All the broker did was encourage us to lower our asking price (which they had set for us) after our apartment sat on the market for more than 3 weeks.

And who says brokers have the ability to ask for (and get more)? There is a house across the street from us for sale now: The broker put in on the market for $1.650million and all of us living in the immediate neighborhood thought it was a real stretch... 4 weeks and 2 open houses later, they have just dropped the asking price to $1.525million.

And who says brokers know how to price appropriately? Two months' ago, a house whose backyard bumps up to ours was put on the market for $999k. Those of us in the neighborhood thought it was way too low. Sure enough, the brokerage didn't even have time to do an open house - the property received multiple bids just from an ad in the NYTimes.

Frankly, right now (and for the past five years) real estate in most Brooklyn neighborhoods sells itself. The fact is that brokers in Brooklyn are desperate for inventory to sell. Currently, their fee structure doesn't justify their value.

Last point: The only downside of trying an FSBO is that once you list your property for sale, brokers will come out of the wordwork and hassle you mercilessly to try to sell you on abandoning the FSBO model and working with them instead. They'll call. They'll email. They'll even show up at your open houses saying that they are "previewing the property for a client they have." If brokers were really adding value to sales cycles, they wouldn't have time to mess around with the FSBO crowd.

Posted by: guest at March 23, 2008 8:27 AM

I agree w/ 8:27. Go at it yourself. forget corcoran or the annoying brokers that call write or hound you. Decide if you are in a rush to sell and set the price with that in mind. clean the place and do your own open house. who better to have the answers than a you!?

Posted by: guest at March 24, 2008 7:44 AM

I can't resist a follow up post (I originally posted on March 23 at 8:27):

In my post, I wrote about a house that was listed across the street from us by a reputable Park Slope brokerage for $1.65mm, then reduced to $1.525mm four weeks later. It is now May 10. That house is still on the market. A couple of weeks ago, the brokerage firm lowered the asking price to $1.485mm. We'll see how much longer this dog sits on the market.

Clearly, brokers have no "magic" pricing formula nor any unique ability to close deals.

But wait... there is a funny continuation to this story:

In April, this exact same brokerage firm got another house listing in our neighborhood one block from us. Unlike the listing I talk about above (which is a house in need of some renovation but the broker still decided to price it at a premium), this new listing was for an absolutely pristine house: 4 bedrooms, original details, dining room, front porch, completely renovated house, modern kitchen, back yard, etc. etc. They asked $1.45mm for it. We went to the open house, and it was a property that was "drop dead" gorgeous. No surprise: The house was immediately snapped up and put in to contract.

In this case, the exact same brokerage "UNDER" priced the new listing ... while their original listing still sits on the market gathering dust.

So what is the funny part?

Well, this brokerage firm clearly has an inflated sense of what its role was in selling House #2 (which was pristine and underpriced) .... and
has conveniently forgotten their role in ensuring that House #1 is still languishing on the market 4 months later with no offers.

How do I know this?

Because the brokerage firm is so pleased with itself for selling House #2 that they drafted a letter that they slipped through the mail slots of everyone who lives in our neighborhood proudly trumpeting that they sold House #2 for a "record amount", and declaring that they are the "best and most qualified" broker in all of Park Slope, and that if the homeowner at this address was interested in a free "appraisal" and a "presentation on why their brokers were the best," they would gladly set up a time with us to sit down and talk. Of course, in their letter, they completely ignore what a crappy job they have done on trying to sell House #1.

Total chutzpah.

So what is the lesson? In Brooklyn, great houses/apartments and low-priced houses/apartments sell themselves and brokers are complete imbeciles.

Posted by: guest at May 10, 2008 3:15 PM