Real Estate 101
by Jim Scott

The following section represents a series of commonly asked questions about the process of buying and selling homes in this market.

Q:  Are open houses necessary in order to sell my home?

A:  Not really.  Open houses can be inconvenient to sellers.  Agents have little control over who can enter your home.  Although problems are rare, some clients are rightfully concerned about personal security.  Open houses are one the best ways for the agent to obtain potential clients.  Selling a home with an open house is a rare event.

Q:  What time of year is it best to market a home?

A:  Not during the summer as is commonly believed. Please note the chart.  Early Spring and early Fall is the best time.
 

Q:  If I cooperate with agents, why do I need a listing agent?

A:  Many sellers do "coop" with agents by offering a 3% sales commission.  They use signs and advertise in the newspapers.  Many books are available that guide a prospective home seller through a sale.  The primary advantage to selling your own home is the potential to save 6% or 3% of the price.  

There are many disadvantages.  Agents offer a professional service for a contingent fee.  These services are worth time and money to clients.  Just as hiring tax professionals usually results in tax savings to the client, we believe in the long run using professionals to market your home saves you time and money.  This is particularly true in the current market.

Q:  Is it easier to sell my home with a large real estate agency?

A:  When you hire a listing agent you are hiring an individual.  Each agent is an independent contractor working under the legal sponsorship of a broker.  Each agent is
really a small business.  Most top agents have their own personal employees who function as assistants.  Like any small business, that agent makes his or her own decisions and is responsible for the majority of their business expenses.  Your decision as to which agent to list with should be based on the merits of the individual, not the size of the company they work for.

Q:  Is the 6% commission set by law?

A:  No.  Clients and agents are free to negotiate the commission.  It is 6% by custom.  Keep in mind that the fee is usually split between two agents, and then split again between the agent and his or her broker.  Generally your listing agent's real commission is about 1.75% of the sales price.

Q:  But doesn't a large company or a name brand franchise have the ability to attract more potential buyers for my property?

A:  Yes and no.  Most of the advertising done by large firms is what could be called "image-oriented" marketing.  This is very effective in generating listings for the business or the agent.  In other words, there are two parts to the real estate brokerage business:  getting the business and doing the business.  Image-oriented advertising, such as glossy ads in magazines, are designed to attract business.  Doing the business, that is selling your home, is not done with billboards or slogans.  At Scott & Quinn we direct our resources to the particular job we have been hired to do.  No amount of image advertising can sell your home.  The most effective tools are traditional marketing methods that all good agents employ.  Our business comes from repeat customers and referrals.  And we get those referrals by performing for clients. 

Q:  What is “Value Range Marketing” now being offered by one of your competitors?

A:  This is where the seller and the seller’s agent agree to list the home within a pricing range, for example $330,000 to $360,000.  The concept is that the lower price within the range will attract more offers than if the property was listed at $360,000 and that having range of prices will inform more buyers and agents about the home.  This idea is based on the presumption that agents representing buyers are ignorant of the market and know little about their client’s financial situation or real estate desires.  Using the example above, if I see the property listed for $360,000 and my buyer can only qualify for a $330,000 home, it assumes I would never think to offer $330,000.  All agencies can offer variable pricing if clients desire it.  You could have it although I think it creates more heat than light. 

My experience is that Metro area agents are a very experienced and professional group and will pay little attention to this gimmick. Its real purpose, in my opinion, is as a sales tool to get listings.(just as what you are reading is!)

Q:  What about the role of assistants now being used in the real estate business?

A:  Many  productive agents rely on assistants now.  Some have two or more.  The policy at Scott & Quinn is to discourage their use.  For example, most agents use assistants to “sit” on broker caravan showings.  Rarely do you see the agent present at these important events.  The success of the broker’s open house is critical to the sales effort.  I want agents present to “sell” the house, not assistants to “sit” the caravan.  

Q:  Is it necessary to pay an extra fee for a Transaction Coordinator?

The object of having a Transaction Coordinator is to free the agent from the routine tasks of escrow.   This can be beneficial to clients as often salepersons are not very adept at paperwork.  You should not, under any circumstances, be asked to pay an additional fee for the Transaction Coordinator.       

Q:  Doesn't a large company have a large pool of buyers?

A:  Each agent is a small business and that agent's main motivation is to match their buyer with a listed property as quickly as possible.  No good agent will only show in-house listings to his buyers.  That would be a disservice to that buyer and in our view unethical.  

Q:  What are the disadvantages of using a small company?

A:   I believe quality individual agents sell houses on both sides of the transaction.  Scott & Quinn has all of the latest technological devices and marketing tools.  We are fully insured and experienced. We belong to all of the requisite professional associations and fully subscribe to the industry's code of ethics.  Selling real estate is not a complicated business and large competitors have no real advantage over small competitors that can be empirically demonstrated.

I would hire someone who was competent, ethical, honest and experienced from a reputable firm.  Those should be the main criteria for selecting agents, not if a real estate firm advertises on television.  What should concern you is what kind of service and results you are getting as a relation to the price you are paying for the service.

Q:  What are the advantages of using a small company?

A:  Primarily in the area of flexibility and level of personal services.   For example at Scott & Quinn all of our agents are available to help the firm's clients.  I believe in helping each other and each other's clients.  

We believe in "client-oriented" service as opposed to "product oriented" service.

We want to build "client-oriented" relationships.  To build these long term relationships we need to have the professional ability to handle all types of real estate transactions, commercial and residential, in Nearly all agents tend to specialize in a particular product and want to provide "product oriented" service a professional and ethical manner.  This business approach is perfectly valid and effective even though it emphasizes the transaction only rather than the long term relationship.

Q:   What is the role of the Internet in today's marketplace?

A:   The Internet will be a major force within the next 24 months.  The information in the MLS is now available for the public.  Scott & Quinn does place its listings on two sites.  As with all forms of technology, the exact role of the Internet in real estate has not been established. 
 

 Send us some information, including a picture, about your home and we'll post your listing on our web site. Email Jim Scott for more information. 

You can reach Jim Scott at his office, conveniently located in the heart of Mission Hills, at 1111 Fort Stockton Drive. Founded in 1982, Scott & Quinn is the oldest full service real estate firm in Mission Hills and is still locally owned and operated. Jim has been a homeowner in Mission Hills since 1976. He is married and has two boys. He can be reached at 296-9511, extension 100.