We received an amusing but telling phone call today from an attorney’s office in Rochester.  The paralegal handling the disbursements of the funds called our manager at 2.5% Real Estate Direct to request an amended commission statement because the original commission statement was obviously erroneous.

The seller of 98 Brookfield utilized the America’s Choice/2.5% Real Estate Combination program where the seller partnered with their agent, Sue Payne, by conducting showings.  This allowed Sue to reduce her commission to 1%. 

While this concept is itself  quite remarkable, it was the fact that there was a buyer’s agent to compensate that prodded the paralegal to call us and question the commission statement.  In Rochester, the listing broker sends a commission statement to the attorney for the seller for the collection of both the listing and buyer agent commissions.  We sent a statement requesting 1% commission to 2.5% Real Estate Direct and 1% commission to the buyer’s agent.

It was the fact that the total commission paid by the seller to both the seller and buyer agent was a combined 2% that was the reason for the call.  This paralegal was obviously accustomed to paying out large commissions and had probably never seen any commission statement so low when two realtors were involved.

Commission statements like this are common occurence for us now.  We just completed a purchase agreement for a sale in Amherst NY where the buyer’s agent commission on a home over $230,000 was a flat fee about $2,500.   That is about 1.25%.

What do you think?

I read an interesting discussion about whether the internet has completely supplanted print media in real estate advertising?  Many real estate agents and brokers desire to have consumers believe that all a seller has to do to be successful is to advertise their home on the Internet.  Many discount brokers have a business model where they show a potential seller that they can post their listing on 16-20 websites.  At first blush this seems to be appealing.  But wait a minute.  Let us look at what Victor Lund of Wavgroup, a real estate industry consulting firm, says on a comment to such a discussion:

The newspaper and other print (especially yard signs) are still major drivers of online search. You can see data that we collected from broker websites which shows that more than 85% of visitors to broker websites come from visitors typing in the domain name . Print and other market branding “told” visitors what to type into their browser.  Research in several industries has shown the best method for promoting your website on-line is through other advertising vehicles. 

To be successful, a Real Estate Company must TELL  consumers what to type in their browser.  This telling costs money.  That is why America’s Choice is so successful.  We have been telling consumers (buyers) to type americaschoice.com  into their browsers for more than 15 years.  We tell them by expensive newspaper advertising, by expensive print advertising in Your New Home magazine distributed in the highest volume supermarkets, by paying for search terms on google and yahoo, by our professional signs, and by a recognizable name.  All of this has worked and is working.   Search engine ranking companies show that America’s Choice is absolutely one of the top utilized websites by buyers in Buffalo and Rochester.  You get what you pay for with us.

To answer the question, just as Mr. Lund implies, the use of expensive media to promote a domain name is what works.  The companies that promote posting listings on domain names not used by buyers in the area are doing a dis-service to sellers.  Think about it.

We are seeing increased activity right now from both buyers and sellers.  Our agents are reporting lots of activity after a brief lull right before school was starting.   All of our Rochester agents have had recent sales, most of them had a multiple sale week.

Sue Chaskes in Buffalo is reporting a long string of sales.  Julie Knaebe has had a very productive week with possibly 4 sales in Niagara County.

Anna and Linda report strong sales in Syracuse.

What do people think?  Let me know.  For Rochester area viewers, please read the article I reprinted from the Wall Street Journal on the Rochester home page of America’s Choice.  It appears the people who are selling have adjusted their prices appropriately to the conditions as they now are present.  Couple that with the desire for buyers to take advantage of the tax credit for properties that close before November 30, 2009,  and you have a formula for increased sales activity.

You can partner with your real estate agent in order to better reach your goals.  The America’s Choice/2.5% Real Estate Direct program can be viewed as a partnership between you and your agent.  You perform some functions by initially showing your home.  This allows you to remain in control with respect to showings and allows you to stay in the communication loop.  The partnership allows 2.5% Real Estate Direct to reduce its fees to as low as 1%. Read about the experience of this couple:

Sent: Thursday, July 16, 2009 8:16 AM

Subject: Thanks to the Staff at America’s Choice

We were very happy with the service, professionalism and efficiency of America’s Choice [and 2.5% Real Estate Direct]Not knowing what kind of service America’s Choice offered, I called Jed Carrol and he thoroughly and professionally explained the 3 options of service provided.  We decided we could show our own home but would need assistance with the paperwork from our agent Sue Payne [of 2.5% Real Estate Direct].  We saved thousands of dollars in commission fees by choosing this option.  Knowing we would be able to sell our home quickly, we did not want to pay the high commissions other realtors expected.  We were told by other real estate agents that we would not get agents to bring their clients unless we commissioned at 3%.  This was not true at all.  We were very pleased to have saved thousands of dollars in commission fees, especially when our home sold in 2 days. 
 
Susan Payne was our agent and she did an outstanding job.  Jenn was very efficient in getting the paperwork, brochures and any questions resolved.  Mike answered all our legal questions and prepared the closing in a timely manner.  Our signs were delivered promptly and look great.  The brochures with pictures and info of our home were impressive. 
 
We really did not have to do anything but show our home and felt comfortable showing it.   It was an exciting and interesting experience for us and would do it again. 
Thanks to everyone at America’s Choice for making this experience so effortless.
 
Bill & Marie Merron
Property at 14 Adela Circle
Rochester, NY 14624

Let me give you two recent examples of how real estate agents use the six month listing agreement against you.   There are certain real estate agents that pray on America’s Choice sellers. They contact our sellers to plant seeds of doubt.  One course of action by these agents is to tell the seller how they have listed America’s Choice customers in the past and have sold these properties. This discourse causes the seller to question the America’s Choice program.  Invariably, the seller does not lower their price while listed with America’s Choice and lists with the agent. 

A seller of a two bedroom patio home in Williamsville called me to ask for my help in selling his home.  He is the uncle of a physician friend of mine. He stated to me that he was in a bad financial situation and could not afford either the upfront America’s Choice fee or the 2.5% commission offered by 2.5% Real Estate Direct.  He also stated that he had to walk away with about $247,000, no less.   I advanced the America’s Choice fee for  him.  He went on the market at $249,000.   Well, after only about 6 weeks with with America’s Choice in November, he listed with one of these real estate agents at 6% with a listing price of $249,000.  I could not believe it.  Remember, he stated to me that he could not afford 2.5% and that he needed to net $247,000.  I have watched as his home remained on the market month after month.  I see it is just now under contract to sell for only $230,000.  After paying 6% commission he will net only $216,000.

This same agent listed another America’s Choice townhome in January.  Same story.  The seller told me he had to net around $140,000.  So he was on the market with us for $149,900.  He listed with this agent at $144,900. I have watched as the home has been sitting on the market.  I see it is now marked sold for only $125,000.  After 6% commission this seller is netting only around $117,500.

So, this agent will probably tell other America’s Choice sellers how she listed these homes and got them sold.  What she is not telling them is the true story how these sellers signed six month listing agreements at 6% and were basically forced to sell at much lower prices then originally listed.  Both of these sellers would have sold for probably more than the prices they received with this agent had they stayed with America’s Choice and lowered their asking prices. They would have sold quickly and netted thousands upon thousands more.  I submit it was the seeds of doubt planted by the agent coupled with the requirement to list for six months that was the reason these people lost so much.   What do you think?

I love it when a seller of one of our homes buys another one of our homes.  It is happening often as we continue to penetrate the market and attract more quality homes.   Brandon and Jenny Bryman purchased our 2.5% Real Estate Direct home at 1542 Church Road in Bennington – which is between Rochester and Buffalo.  The seller of Church Road is paying a commission of 2.5% on a sale of about $350,000 – Barb Murie is the agent.  In order to purchase Church Road, the Bryman’s put their beautiful home at 968 Three Rod Road in Alden for sale with America’s Choice and 2.5% Real Estate Direct through the 1% combination commission program.   They sold their $200,000 home for only 1% commission – Barb Murie handled their sale.

Our seller of 11 Orchard Hills in Spencerport has sold and is buying our home at 51 Village Walk in Spencerport.  Our seller of  of 17 Coleman and the seller of 51 Village Walk used Susan Payne as a buyer’s agent to buy a new home.

Many of our sellers use our agents as buyers agents when they buy a home as well.  The seller of 611 Hosta Circle in Penfield sold with the America’s Choice/2.5% Real Estate combo program.  She offered two percent to buyer’s agents and was told by agents that she would never be able to sell without offering 3%.  Of course she did sell and now she has used one of our agents as a buyer’s agent for her next purchase.  This occurs because of the trust created by the professionalism exhibited by our agents and staff.  We really care about our customers.

Deplorable is the only way I can describe the recent behavior of real estate agents in the Rochester market.  I must surmise the behavior I am about to describe is in response to the many homes we are selling for low commissions.  Our America’s Choice/2.5% Real Estate Direct 1% combination program truly offers more than is offered by agents charging 6 or 7% and it is working better.  Homes are selling faster, for more money, and with less cost to sell.

We have been informed that real estate agents are telling homeowners that they MUST offer at least 3% to buyer’s agents on the MLS to entice the agents to show their home. We have been informed by two sellers in Rochester that a high up member of the GRAR started mocking them for seeking to sell their homes with reasonable transaction costs (i.e., not paying $10,000 to $35,000 to sell their homes). This “professional” real estate agent with all the designations following his name even went so far as to raise his voice when they would not list with him for 6 or 7%.

Read what Griffin Coles writes on April 17, 2009:
April 17, 2009
From: Griffin Coles
Property:  291 Neros Run, Webster, NY

I am extremely happy I used America’s Choice and would never pay the sales commission to use a traditional realtor.  I sold my townhouse with the use of America’s Choice and the MLS through 2.5% Real Estate Direct in 4 days. With the combination of America’s Choice and the MLS I received as much exposure to the market as any agent could offer for thousands of dollars less.  In fact, a real estate agent specifically told me that I would not be able to sell my townhouse through America’s Choice because other real estate agents would not bring their clients to see the house unless they received a 3% commission. The real estate agent also had a lot of negative things to say about America’s Choice which statements were unethical and were absolutely false.

The townhouse sold in only 4 days and I ended up paying another real estate agent only 1.5% in commissions.  The buyers of my townhouse found it online themselves and set up the appointment without the help of their real estate agent.  That’s how much exposure America’s Choice and the MLS can provide you with.

Having Sue Payne as my real estate agent from 2.5% Real Estate Direct was a huge help.  She guided me in the right direction from day 1 and all the way through the closing. Sue dealt with the buyer’s agent with the negotiations and went to battle for me. It was nice to know she had my back and looked out for my best interest.  She provided me with the selling recommendations which got me the maximum price for my townhouse in the shortest amount of time.

My parents used America’s Choice, my brother-in-law used America’s Choice and now I have used America’s Choice.  It really works and it saves thousands of dollars that can bue used for all the other expenses that come along with buying a home.  I would recommend America’s Choice to anyone.
Thank you,

Griffin Coles

I put forth the following for your consideration:

1.  Offering a commission to buyer’s agents has nothing (or very little) to do with the number of potential buyer’s learning that your home is for sale.

2.  The amount, if any, that you offer to a buyer’s agent has nothing (or very little) to do with the the number of potential buyers viewing your home or making an offer.

3.   This accounts for the anger displayed by the real estate agent in my discussion above.

Why do I put forth the opinion above?

A.  In England, France and almost every advanced country worldwide the concept of sellers offering high commissions to buyer’s agents is unheard of.

B.  The reason is simple:  there is no viable reason to make such an offer to buyer’s agents for the purpose of increasing your exposure to buyers.

C.    The reason there is no viable reason to offer a commission to entice a buyer’s agent to show your home is that BUYERS already (or will on their own) know your home is for sale.  You don’t need a buyer’s agent to TELL potential buyers about your home.  YOU and /or your listing broker have already told the buyers about your home directly through (1) Realtor.com, Homesteadnet.com, Buffaloniagarahomes.com, keepequity.com, americaschoice.com, any of the major realtors websites (which take their listings from your MLS listing with your listing broker) or any of a myriad of Internet sites that attract buyers; (2) print advertising in newspapers and real estate magazines  and (3) real estate signs.

We sold a home on Seneca Lake for over $500,000 where the buyer’s agent was required to take 1% (they wanted 3%).  We sold a house on Graystone in Orchard Park where the buyer’s agent took 2.5%.  I understand there is another home in Orchard Park which is going to contract this week at over $400,000 where the buyer’s agent is taking 1%.  We sold a home on Woodbridge in Buffalo where the buyer’s agent took 2%.  40 Chapel Woods West just sold for $285,000 where the buyer’s agent took no commission (because even though the seller was offering a commission to buyer’s agents, the buyer came directly to the listing broker). I recall a home in East Aurora which sold for over $150,000 in which the buyer’s agent took 1.5% (the interesting thing about that sale was that the same real estate company that took the 1.5% had been the prior listing broker asking 6%). In Rochester we just sold a home on Seawatch Trail for $250,000 in which there was no commission at all to the buyer’s agent (of course, many, many America’s Choice homes are sold commission free).  The last four Rochester area sales with buyers agents commission being paid all had commission paid to buyer’s agents of between 1 and 2.5%. That is it.

What does this tell you?  The buyers know your home is for sale because of your or your listing broker’s efforts.  With regard to the MLS, a good listing broker is imperative, as the listing broker is responsible for advertising your home, including the Internet, and for taking the calls and emails from potential buyers.  The MLS is only as good as your listing broker (because the listing broker’s name and phone number is the only one to appear on Realtor.com and other MLS sites).

You do not HAVE to offer a commission to buyer’s agents to increase the number of people seeing and making offers on your home.  Potential buyers will find a way to see  your home if a buyer’s agent does not want to show it.

Think about England and France where real estate commissions are around 2.5% total – just like 2.5% Real Estate Direct.  The combination program between 2.5% Real Estate Direct and America’s Choice can bring the commission down to 1%.  Use your analytical mind to see through fear mongering by people interested in forcing you to pay much more than you should, and I submit, much more than is reasonable.

All of the above doesn’t mean that there isn’t any reason to offer a buyer’s agent a commission.  Some sellers feel that since some buyers have been working with buyer’s agents  these sellers want to pay those agents as part of the transaction.   A good buyer’s agent can have a positive impact on your sale.  It is a choice.  I reiterate, the reason to make such an offer to buyer’s agents should not be because buyer’s agents say they won’t show your home.  Their resistance to show your home does not equate to buyers not seeing your home.  They may want you to believe it does, but there is no credible evidence to support that claim.  The offer to buyer’s agents should be for the positive role  they can play in the transaction, and the amount does not have to be 3%.

In the 30 day period from January 9-February 9, 2009 we have had vistors from all 50 states.   From which states do you think the most buyers are looking at  your home on americaschoice or keepequity? The order is: Florida, Virginia, California, New Jersey, Maryland, Ohio, Illinois, Washigtion, Texas, North Carolina and Michigan. Why?  Notice the top three are states where prices have really fallen and where prices have been high.  Could it be people are returning to the area for affordable housing while they regroup during these difficult economic times?

We had viewers from 20 Countries. The top?  Canada, United Kingdom, Netherlands and Ireland.

We received ten of thousands of visitors during this period with 41% being new visitors each day and the rest returning visitors.  53% of our visitors came directly from knowledge of our websites.  This means our constant advertising of our site drew them to your  home.  32% came from search engine optimization. This means we are able to identify the search terms buyers use on google and other search engines and draw them in to our site.

What we know from our vast experience is that being on the web is not enough.  Being on  a site that draws buyers it the key to success.

Interesting how 2008 ended and how 2009 is beginning:

Syracuse:Anna Phillips had a rash of really good sales in November and December of 2008.  She sold a property on Gaskin Road in Baldswinville for $300,000 and property on Mourning Dove in Baldwinsville for over $300,000.  Mourning Dove had two offers.  On top of this Anna sold four more homes.  Linda Pacelli has listed property on Cazenovia Lake for over $500,000 and some other really nice properties.

Rochester: I spoke with a gentlemen from Brighton about two weeks ago.  He explained to me that he had been listed with a high commission real estate agent for six months with very little action.  I explained our tag team program utilizing both America’s Choice and 2.5% Real Estate Direct.  He listed with us at the end of January 2009 and just yesterday I was informed that he has accepted a contract for $294,000.  Congratulations!  He understood that between America’s Choice and 2.5% Real Estate Direct he could obtain more exposure than offered through the traditional real estate companies.  The reason is simple: we offer more direct advertising on the Internet and in print and we combine that with the MLS.  No one offers as much no  matter what they charge.  50 Sea Watch Trail in Penfield sold through America’s Choice in January of 2009 for $250,000 with no commissions paid. They had listed with us in late November of 2008.  So they sold right in the heart of winter!

Buffalo:  Royal Woods is an upscale neighborhood in East Amherst.  Both America’s Choice and 2.5% Real Estate Direct had great success recently.  37 Contessa Court sold for over $300,000 at no commission through America’s Choice in about a month. This was the 3rd home sold by this seller with America’s Choice within the last four years.  All of the homes were in the $250,000 to $325,000 range.  Each time he has sold commission free. 

Sue Chaskes of 2.5% Real Estate Direct sold 169 Viscount for $378,000 in December of 2008.   Sue also sold a home in Forest Heights that just closed for $275,000.   Barb Murie just sold 4 homes this week.  Barb sold over $10,000,000 in 2008.   In mid-January 2009 Barb sold 29 Ashwood Court in Lancaster for around $290,000 on a contingent basis to a buyer who chose to use the combined America’s Choice/2.5% program to sell their home.  Just this week there were two offers on the buyer’s home. The seller chose the better offer and will be proceeding to complete the purchase of Ashwood.    A home on Winterwood in Tonawanda listed on January 20, 2009 and is already sold.  The seller told us that her relatives said a  home could not sell in winter!

So the cold continues as I write today.  It was -4 degrees this morning. However, the sun is shining as we move towards the Spring market.