The Economics of Selling Your Home
Anyone with a basic grasp of free-market economics understands you will get the best price for a product when you expose it to the entire market. But there are many large real estate brokerages that are using your listing for their own gain by only advertising it to agents in their own office. This violates rule #1 that exposing your home to the largest group of buyers will get you the best price.
This text is from a Facebook post of an agent complaining about how they weren’t given information about a listing being privately sold by a large broker.
Why Big Brokerages Limit Your Listing's Exposure
Why would they do this? For two reasons. The stock market rewards real estate companies for 2 things; the number of “sides” they sell and the number of agents they have, called agent count.
The overall number of real estate transactions is at a 30-year low. If a big broker only advertises your listing to other agents in their office, they have a better chance of representing both the seller and the buyer. That means rather than only getting 1 side out of your home listing they will get 2. That’s good fro the broker’s pocketbook but not yours.
Second, these big brokers are going out to other real estate agents and using your home listing to recruit them to their brokerage. The carrot is if they go to work for the big broker, they will get more opportunities to sell these private listings. For the brokerage, the higher their agent count the higher their stock price. That’s great for them, but why do you care about their stock price?
Commitment to 100% Market Advertising
Recently, a client/friend asked us if we knew a great real estate agent in San Jose. As it turns out I do and I connected them. I never considered recommending a big brokerage because one of the considerations I have when recommending an agent in another area is I will only recommend agents who advertise their listings to 100% of the market and not only to the agents in their brokerage.
If you plan to sell your home, now is the best time to attend our Free Home Selling Seminars. If you want to attend a seminar, contact us, and we will notify you when they are scheduled. As always, you can check KopaSeminar.com to see the dates and times of our in-person and online Free Home Selling Seminars. For years, home sellers have told me they benefited from attending our events. Sign up for our Free Home Selling Seminar in Austin or Cedar Park at KopaSeminar.com.
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