Mike Budd is a 19-year Berkshire Hathaway HomeServices Colorado Properties veteran, specializing in residential and commercial real estate.He was named Vail Board realtor of the Year in 2016. A Vail Valley resident for 21 years, Budd has seen the Vail Valley evolve into one of the most desirable resort/lifestyle communities in the world. Contact Budd with your real estate questions at firstname.lastname@example.org or 970-376-4511.
Ask a Realtor: What is the value of a broker?
Weighing the listing options facing homeowners today
My wife and I considering listing our home and mentioned this to some friends at a recent dinner party who advised us to save some money and list it on our own. They also mentioned it is now possible to pay a nominal fee and get it listed on the multiple listing service (MLS).
Realizing the internet has impacted greater access to information and ways of doing business, in theory it seems to make sense and see if we can avoid paying some or most of the fees. That being said, we also typically believe you get what you pay for. We thought it would be helpful for us and others who may be considering the do-it-yourself (DIY) versus broker option to better understand the benefits and ROI (paying fees or not) of working with a broker.
Can you explain?
Dear Curious Seller,
In response to your comment “you get what you pay for,” I draw upon another adage, “If one represents themselves in a court case, it’s possible the representative is not the best value.” (This quote has numerous definitions, but this is the least colorful.)
One of the reasons to work with a realtor is that the 1.4 million representatives in the country have a strict Code of Ethics to which they must adhere, and which requires the representative to work in the best interest of the buyer or seller they represent.
In Colorado, realtors are required considerably more class time in order to get a license to practice real estate. Thus, practitioners in Colorado are all brokers and not sale agents. This practice is an effort to offer the buyer or seller a better educated and more professional representative than licensed ones in most states.
No matter what side the broker represents, the designation of “trusted advisor” is the way you should be provided service. The following are recommendations and benefits of working with a broker versus DIY selling.
Hold an initial meeting to review market activity, discuss comparable pricing and develop a marketing plan for listing and selling your property. This is a much more sophisticated way of selling than simply putting a listing in the MLS. The marketing plan should include professional photography, including videos, possible aerial shots or video and possible 3D technology to enhance presentation. Virtual or real staging will also help buyers see the property in its best condition.
Develop an open house schedule and clarify availability for showings. This is because buyers expect properties to be available within reasonable timelines. A good broker will help manage this process, which can be time consuming and inconvenient for the seller as it requires on-site support for all open houses.
Discuss and develop an advertising plan, which is a significant part of the process and incudes assuring the MLS, all real estate portals and outreach by the broker are optimized to give a quality presentation. Depending on the price point and the market this can be a significant cost and one carried by the broker, not the seller.
Upon receipt of an offer, the broker becomes the conduit for communication and evaluation concerning the offer. You then become the decision maker of acceptance or not, with access to the objective perspective of the broker based on market trends to make a more informed decision. This includes any contingencies that come with the offer and explanation of pros and cons.
Once the offer is accepted, the broker helps with the tasks leading to the closing table. This includes title insurance procurement and assisting in this process, as well as support and advice on other issues that may arise, including loans (If being used), appraisal objections, property inspections, etc.
A reputable broker can help guide you from listing to closing and serve as a valuable, objective resource for what can be an emotional process. This includes reviewing possible scenarios in advance and coming up with contingencies to avoid stop-gaps in the process. Most of the issues that arise can often be anticipated and by doing so, alleviate much of the stress associated with selling your home.
While price is the first thought one might have, when buying or selling one of your biggest financial (and lifestyle), I invoke a comment expressed to me by a mentor many years ago: “One should always focus on value not just a price tag.”
Good luck with your sale,