This is a true story about someone who wanted to save commission on their condo sale.
I met a condo owner who asked me a lot of questions about selling his condo. He wanted to know how the market was doing and what his condo could be worth. I gave him information about how much is condo is worth and what it would require to find the right buyer. I told him how much commission he would expect to pay and what he should expect to get from it.
He listed with a private sale company a few weeks later
He chose the option which allowed him to list on MLS. The condo was a bit overpriced compared to comparable condos that have sold. His only marketing strategy aside from the MLS was holding an open house every weekend. He promoted his open house with a homemade plywood board sign and sometimes added colourful balloons to it to catch attention. He posted three or four signs in the immediate area near the condo.
Did It Sell?
Two months later, his overpriced condo still didn’t sell. He terminated the listing from the MLS. But he kept marketing his condo through open house signs. I would drive by and after three months I’d still see his open house signs. I decided to call him to ask how much he was selling for. He had increased his asking price. Now his condo was even more overpriced than when it was listed.
Minimal Marketing to Save Commission
Three or four homemade plywood open house signs with some balloons taped onto it does not sell a condo. Relying on someone to pass by and see the signs is not effective marketing. Choosing to save commission versus paying a commission to get the most marketing will end up costing this condo owner more money. As of the day I wrote this sentence, he still hasn’t sold his condo. And it has been close to four months.
What’s Your Time Worth?
This condo owner had to spend money (and time) upfront to get to the point of still not being able to sell his condo. He had to buy a plywood board, print and attach the signage onto it, pay the private sale company, sit in on his own open house during the weekends (and I counted over three months, with two hours each day on Saturday and Sunday). How much effort is that worth to still not be able to sell a condo?
Saving Money vs. Finding The Right Buyer
Everybody wants to look after their personal interest and save commission to keep the most amount of money. This is a natural way of thinking. But what some sellers don’t realize is that the commission is an investment to get the most exposure, find the right buyer and obtain a higher selling price. Saving money might not get you the highest selling price. You might get less for your condo if your only focus is saving money.
An experienced real estate professional puts the commission to work to do three things:
1. Properly present and market your condo with high quality marketing.
2. Attract the most number of qualified buyers possible from different channels.
3. Negotiate the highest selling price and protect your best interests.
Private sale companies are limited in these three activities. They will take photos of your condo, collect information from you, and put it up on MLS. They may assist you with negotiating. They may guide you through to closing. But you’re left at your own peril to take care of the sale from start to finish.
A real estate professional will have more marketing avenues than just listing on the MLS. They will promote your condo on different marketing channels that attract more buyers. Restricting yourself from different marketing channels will limit the number of buyers who see your condo. Working with a limited number of buyers will not get you the best selling price for your condo.
You might lose money if you’re not an experienced negotiator. A real estate professional who is skilled at negotiating is well worth the commission you invest. They will get a higher selling price than someone who is not motivated to act in your best interest.
Some private sale companies charge a small fee to negotiate on your behalf. What is their motivation to get you the highest selling price?
A real estate professional whose commission is on the line will work hard to negotiate on your behalf. They will make sure both you and the buyer get what you want. They’ll definitely make sure you get the highest price possible and make it worth the commission you pay.
Protecting Your Best Interest
You hire a real estate professional to protect your best interest. They do not get paid upfront. They do not get paid if you do not get what you want. They are motivated to act in your best interest to make sure you get what you want.
Do Your Research
When I sold my investment condo, I paid the real estate professional who found the buyer for me. I got the exposure I needed and the price I wanted. It was well worth the commission I paid. I could have listed privately and waited to find my own buyer. But that would have cost me more than the commission I paid for a real estate professional to find me a buyer willing to pay the price I was looking for.
It is your decision whether to sell privately or work with a real estate professional. Do your research. Ask anyone you know who has sold a condo. Learn about their experiences.
Make sure you understand the services being offered to you and how they will benefit you when you interview real estate professionals. Ask for references from past clients. Ask them to show you the data on the condos they’ve sold. See how long it takes them to sell a condo and how much they end up selling for. Learn as much as you can and make an educated decision in selling your condo.