The Denver real estate market continues to be red hot! Sellers are seeing their homes under contract in just a few days with multiple offers driving the price up. With quick closings, sellers should be jumping for joy as they are able to move on with the next chapter of their lives. However, these sellers are losing money and, sadly, do not even realize it.
The value of any product, including a home, is based on basic principles of supply and demand. With high supply and low demand, Buyers have the upper hand. They have plenty of homes to choose from so Listing Agents (aka Seller’s agents) have to work extremely hard to attract these limited buyers and showcase their client’s homes. As a Certified Luxury Home Marketing Specialist, I understand how a great marketing plan and an aggressive listing agent can influence the demand for the product (i.e. increasing the value by increasing demand). Our approach is much more involved than an MLS listing and a lockbox. We showcase the lifestyle one can enjoy in the house and neighborhood. Our agents are selling homes by using advanced social media/internet approaches, being present at showings and by actually representing sellers at every step of the process. Basically, we put in a lot of time, money and effort to ensure the Seller is properly represented and is able to get the most value for their home. We don’t simply rely on a Buyer’s agent to sell the value of the home.
In Denver, we are experiencing a Seller’s Market – low inventory with high demand. Overall, the market is setting the top value of the home not the Listing Agent. In many cases the Listing Agent is purely a Listing Agent – entering basic MLS information, scheduling a photographer and installing a lockbox to allow Buyer’s Agents to tour the home unaccompanied. Then they sit back and wait for the multiple offers to roll-in.
So how could Sellers be losing money if the home prices are high and there are multiple buyers competing for homes? In a Buyer’s market, Listing Agents work their tails off to get Buyers into homes. In a Seller’s Market, the Listing Agents only have to do the minimum amount of work, as the market controls the pricing and buyers are easy to come by. Unfortunately, given this is a commission-based industry the current market is taking advantage of Sellers. Is it fair for sellers to pay the same fees regardless of the work their agent has to put in? Given a sales price of $500,000, Denver area listing agents would make around $14,000 (2.8% on average) regardless of whether house sits on the market for 7 days or 7 months. Home Sellers in hot markets are subsidizing the costs for those Sellers with harder to sell homes due to the market or other factors, with the idea that Agent’s fees “even out” over time. You see this same thing for sellers who properly prepare their homes for sale and properly price their homes versus sellers trying to sell “as-is.” But why should you, as a Seller, take the monetary hit?
At Smart Growth Living, we are dedicated to getting our clients the best value for their home. In fact, we have a fiduciary duty and obligation to do so and we feel that our professional services fee should reflect actual amount of work that we do. Otherwise, we feel that because of current market conditions we would be taking advantage of our Seller clients.
Today we are proud to offer a “Quick Sale Rebate” to our sellers so that they too can take advantage of the market and the amount of work that we have to put in to selling the home. Our professional services fee will be reduced to 1%* if sellers accept an offer within the first 7 days (or 1.5%* within 14 days) which is a significant majority of homes in the Denver area. We can make this offer as in a quick sale we are saving on costs associated with our luxury home marketing approach. It costs money for our property booklets. It takes time to attend every showing. In the above example, a seller would have lost $9,000 by using an agent whose fee is not representative of the actual work.
So, if you want the best professional representation with the Seller being able to reap the rewards of the current market, lets discuss how to get your home sold in the shortest amount of time. If the market changes, you are still in the best possible situation as our advanced luxury marketing and sales approach will be there to ensure you get the best possible value for your home.
Don’t lose money on your home sale just because you are selling during a hot market. Ensure your listing agent has the business and real estate experience to get you the best deal and that they reward you for having a home that will sell quickly.
For more information on this program, do not hesitate to contact us at Smart Growth Living.
Real Estate Advisor
Smart Growth Living – Denver
* Don’t worry, the Selling (Buyer’s) Agent fee stays the same so there are no issues with agents “overlooking” your home because they get a reduced commission.