Monday, March 12, 2007

Limited-Service Realty Companies vs. Full-Service Realty Companies

When I think full-service vs. limited-service, I automatically think of food: McDonald’s vs. Red Robin, Taco Bell vs. Macayo’s, Long John Silver’s vs Papadeaux’s. Limited-service would be the fast-food restaurants. I order my food in the drive-thru or at the counter a la carte, or I can choose a value-meal, and pay upfront. I can take it home (saving the price of the drinks!) or to a table, get my own refills, clean up after myself, and walk away without owing any tip. I paid for my food which included a slight cost for restaurant maintenance, employees, etc. Fast-food is great when I’m desperate to eat something or when I need something (somewhat) cheap to feed the kids between activities. It’s not a place I would choose to invite someone in order to impress them.

When I think of full-service, I think of a “sit-down and let us serve you” restaurant. I expect great service. I want someone to make suggestions based on their expertise of the food. I want to be served my meal on a clean, well-kept table. I expect fine quality food. I want someone to check on me throughout the meal to make sure that I am enjoying myself and that I’m satisfied with my food. And, I expect to pay a minimum of 15% to the person who serves me. But, I don’t expect to tell my server to give any certain amount of his/her tip to the host/hostess who seated me (that is his/her separate agreement). Okay, so how does food-service compare with realty?

When you choose to list your home with a limited-service company, you can order the value-plan (much like a value-meal) which packages some services you want and pay an upfront fee (which can be varying amounts depending on how many services you request). You can also add some items a la carte that require an additional fee (such as signs, brochures/information sheets, photos, virtual tour, internet listing, MLS listing, open houses, and additional time beyond the allowance of the value-plan). The upfront fee is what is advertised on their websites and commercials as the “save the commission” and “sell your home for only X amount of dollars.” What many people do not realize is that the amount you pay for limited-service is generally not refundable even if your home doesn’t sell within the time-frame allowed. What happens then? Some people will decide that paying again for the limited service is still cheaper than hiring a full-service agent, and others will question why they didn’t just hire the full-service agent in the first place. Another misconception is that you save the ENTIRE commission. When these services place your home on the MLS, they will require you to offer a commission to the agent who finds a buyer for your property, usually 2%-3%. So, if you are paying the agent who finds you a performing buyer (one who actually completes the sale) $5000 (2%) on a $250,000 home, and paying the listing service $800.00, how hard do you think the listing service will work to sell your home? They have already been paid for their service, and it’s non-refundable whether you sell or not. If you are lucky enough to sell your home to a buyer who does not have an agent you might get away with selling your home for only the $800 you paid the service.  But, chances are a different agent will bring in the buyer.

When you choose to list your home with a full-service agent, such as one of us at The Butterworth Group at Dan Schwartz Realty, Inc., you will receive the same services listed above (especially tailored to your needs and the sales-expertise of your agent), personal advice & consultation as often as you would like, as well as the knowledge of someone who works and knows the real-estate business on a daily basis. And, we do all of this with no upfront cost/payment, but with the highest integrity and quality because we want to sell your home. You don’t pay for your service until your home is sold. And you don’t even pay us 15%, as you would for service in a restaurant. You’re right in thinking that the prices are not the same. The price of a home does not compare to the price of food in a restaurant, however neither is the time, effort, and money that goes into offering a home for sale. If your home doesn’t sell during our contracted time and you decide to find another agent or to go it alone, you owe us NOTHING! You don’t owe us the money it costs to install a post to advertise your home to passers-by, you don’t owe us any money for printing or supplies, you don’t owe us for the time we’ve spent at your home for Open Houses, you owe us nothing for consultation, nothing for the completion of paperwork, or for the webspace to advertise your virtual tour, etc. Honestly, what do you have to lose by trying us FIRST?