WHY BROKERS DO IT?
Since everyone love sto bash a broker or two (especially Corcoran’s) 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? So many FSBO’s who can’t attract w/ a better price than what an agent who has jacke up…
Since everyone love sto bash a broker or two (especially Corcoran’s) 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? So many FSBO’s who can’t attract w/ a better price than what an agent who has jacke up a price to cover the commission and still get the price they ask? Frankly I find it disgusting.
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.
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!?
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.
Just follow the ABC’s of real estate: Anyone But Corcoran!!!!
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.
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.
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%.
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.
Buyers will always think the property is overpriced and sellers will always think they didn’t get enough. It’s always the broker’s fault.