Why Should a Seller Hire a broker?

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So you don’t have to use a broker

-       There is no law requiring a seller to use a broker in New York

-       I can have a few nice photos taken and list them on Streeteasy, why should I pay a seller’s broker 3%?

It’s time for transparency and democracy!  Let me break down the things a broker does and let you be the judge on whether it is worth your money.

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1. Listing Price and Strategy

The ultimate reason to hire a seller’s broker is to sell your property at the highest price possible.  Statistics from the National Association of Realtors show that For Sale By Owner listings sell for on average 12% less than comparable listings with a broker.  A seller’s broker’s ultimate responsibility is to have a good handle on price.  It is of paramount importance to have a realistic expectation of the sale price range.  This is accomplished by studying the comparable sales in the building and the neighborhood.  All the data is out there.  A broker would have seen many of these units in person, they would probably know exactly what price a listing just went into contract for.  Then there is the pricing strategy.  What happens if you go out 20k higher than the expectation?  What about 100k?  What about a little bit under?  A good broker has a good sense of:

a.     Transaction price range

b.     Market reaction to the different positions a seller might want to take

c.     Digest the market feedback after showings begin and have a clear picture of where the listing stands

A good broker will have the confidence to tell you the facts you might not want to hear but need to hear to have a property sold at the highest price.

2. Getting the Apartment Show Ready and Marketing

I sold one of my own investment properties when I first started in the business.  Looking back on it, I undersold it because I didn’t do everything I would do today.  I didn’t find the selling point and emphasize it.  I didn’t get it show ready.  I didn’t advertise it away from Streeteasy and Zillow.

3. Marketing Materials

The broker pays for professional photography, videography, floor plan and flyers

4. Showings

Showings are important too.  Every showing is an opportunity to gather market feedback on the property and price.  A good broker looks the buyers in the eye and transpires trust and comfort.  Of course the listing broker conveys all the good features and updates of the home 

5. The Feedback Loop

The feedback loop is the iterative process a seller and his/her broker go through with each round of price adjustment.  It is important not to let a listing languish.  More time spent doing the same thing will not give a different result.  Most sellers are emotional when it comes to reducing price.  The broker brings a rational voice.  But there needs to trust between a seller and his/her broker.

6. Buyer Evaluation and Negotiation

It is tempting to just accept the highest offer.  But it is important to evaluate each offer and make sure there’s reasonable amount of confidence that the offer will sign the contract within 2 weeks, will get the mortgage and will pass the board.

The negotiation process is a whole separate matter.  It is not about just not giving in and getting what you want.  It is about getting out everything the other party is willing to give.  This is achieved by being perceptive and being able to extract information.  This takes practice.

7. Trouble-shooting and Process Management

The selling process is a long process.  The seller/seller’s broker needs to check in on the buyer to make sure everything is moving along to control the timeline.  It is also very common for unexpected issues to pop up like an illegal w/d.  What to do then?  A good broker tells you exactly what you are dealing with and gives you all the information so you can make an informed decision at every turn.

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